UK companies planned to spend more in the second quarter of this year than they did in the same period of last year, but business optimism for the coming year may well be down. These are the findings of the first Bellwether report from the Institute of Practitioners in Advertising (IPA).
The largest increase was recorded for direct marketing budgets. The least significant rise in planned spending was recorded in media ad spend budgets, but internet marketing was found to have had budgets “revised up very sharply” again, having already risen during the first quarter of this year. However, nearly one in two companies said that internet marketing represented less than 1% of their total marketing expenditure, while 25% said that they spent nothing at all on this area.
The reports are to be based on questionnaire surveys of around 300 UK companies and are designed to track marketing trends. The first of these reports found that 39% of companies surveyed set new budgets which represented an increase on 1999 actual spend.
Rupert Howell, president of the IPA said, “I’ve always said that the advertising agencies in this country are the bellwether of the economy. This is the first quarterly survey of what will come to be regarded as one of the leading indicators of the UK economy.”
The conclusion of this quarter’s report was that although a significant rise in marketing activity for the current year was indicated, the extent of the improvement was less marked than seen for new budgets set during the first quarter. This is thought to point to a reduced level of business optimism for the year ahead, compared to that indicated by the first quarter data.
