Bellwether Report: Marketing budgets cut at slower rate in Q2

The rate of decline in UK marketing spend has eased for the second quarter in a row, according to the IPA’s latest Bellwether survey.

The 2009 Q2 report links the easing to an improvement in business confidence, with companies surveyed reporting that their financial prospects have improved for the first time since the first quarter of last year.

Although the rate of decline remained severe for Q2, raising the risk of marketing spend falling in 2009 even more than in 2008, one-in-three companies reported that their financial prospects had improved compared to one-in-four reporting a deterioration.

Rory Sutherland, IPA president, vice- chairman, Ogilvy Group UK, said: “To anyone optimistically inclined, the April Bellwether seemed to signal the bottom of the market, and the new report suggests that the worst is over.

“Budget cutting for all marketing communications categories seems to be slowing and, while the economy is still tough, the balance of executives reporting improved prospects moved into positive territory for the first time since Q1 2008.”

Spend was reduced for all categories of marketing in Q2, but at a slower rate of decline. Budgets for main media advertising and ‘all other’ (includes PR, event sponsorship and market research) were again hardest hit amongst those companies surveyed.

ZenithOptimedia recently forecast that UK adspend will drop 10.5% this year, with global spending set to fall 8.5%.

Figures from the Advertising Association released last month revealed that UK advertising expenditure dropped 4% year on year to £18.6 billion in 2008.