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Bellwether Predicts Turning Point for Marketing Spend

April 6 2009

The rate of decline in spend on marketing slowed during the first quarter of 2009, suggesting budget cutting may have reached its peak in quarter four 2008, according to the IPA's latest Bellwether survey.

Business confidence has picked up from an all-time low in Q4, with the percentage of companies believing their prospects have improved rising from 5% to 14%.

The survey also provided provisional data on actual marketing spend in 2008 and confirmed the first annual fall in the survey's history, after 48% of respondents reduced spend compared with the 10% that increased it.

'This data supports the view that the bottom of the market has been reached,' claimed IPA President Moray MacLennan: 'It will be a long road to full recovery, but this maybe the turning point.'

Although the overall budget cut is the second steepest decline in the survey's nine-year history, with spend set to fall again in 2009, the net balance of those reporting an increase minus those reporting a decrease rose from -42% in Q4 to -34% in Q1.

The worst hit areas were budgets for main media advertising and 'all other' (which includes market research, PR, events sponsorship).

The report's author and Chief Economist at Markit, Chris Williamson, warned that it is unlikely that a return to growth will be seen this year, as expenditure on all types of marketing and advertising continues to fall at rates that were 'unprecedented prior to last autumn'.

Despite the bleak news, the results were better than the fourth quarter last year, when 49% of companies cut spend and just 7% increased budgets.

The Bellwether Report is researched and published by Markit Economics on behalf of the IPA, and features original data drawn from a panel of around 300 UK marketing professionals.

Web sites: www.ipa.co.uk and www.markit.com .

All articles 2006-21 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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