IPA's Bellwether Report Findings
July 18 2002
A further recovery in marketing expenditure is predicted for the rest of 2002. This is according to the latest Bellwether Report, the NTC/IPA quarterly survey of marketing budgets published earlier this week.
The net increase signalled by the report is the strongest since the survey began in Q1 2000. This quarter's findings reveal that the UK's total marketing spend for 2001 is estimated to have been £42bn. The spend has remained unchanged on average for companies operating both on a calendar and financial year accounting basis.
The report also calculates marketing expenditure for 2001 as follows: media advertising (35 percent), direct marketing (26 percent), all other (24 percent) and sales promotion (15 percent). Other major findings include:
- Current marketing budgets are up for the second quarter running, with one in four companies noting upward revisions.
- Media adspend is down, but only moderately, for the sixth consecutive quarter.
- Direct marketing budgets are up for the third consecutive quarter.
- Sales promotion budgets are up for the first time since Q4 2000.
- Internet-related activities are up for the second quarter running.
The report's author, Chris Williamson of NTC Research, said 'The Q2 2002 Bellwether report provides some further evidence of a recovery of business confidence and marketing spend from the lows of late last year. However, the fact that media advertising budgets continued to be cut, albeit at a much reduced rate, reflects reluctance among advertisers to commit spend due to ongoing uncertainty regarding the economic outlook. Thus, although signs of a bottoming-out of marketing spend are apparent, a question mark still hangs over the strength of the current upturn.'
The IPA's president and group chief executive of Leo Burnett, Bruce Haines, noted, 'It is encouraging to see that the first two quarters of 2002 show advertisers are increasing their marketing budgets after six quarters of decline. Nevertheless we are still concerned about their commitment to media advertising which is still weak, although an improvement on the six previous quarters. Of course advertisers use direct marketing and sales promotion to retain existing business, but to launch, re-launch or to grow a brand, media advertising is a central component of the marketing mix. In fact it's the only way to build brands fast and effectively.'
All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.
