The IPA released it’s Q2 2001 Bellwether report today which drew unsurprising conclusions about UK marketing spend. Leaving aside the much-discussed move away from television (see Forecasts) the IPA reveal a shift towards ‘below-the-line’ activities when decisions are made about marketing spend.
Investment in direct marketing in particular showed a significant increase in 2000, taking the largest share of company marketing spend (60.3%) whereas media adspend declined, netting only 53.3% of total marketing spend in 2000.
Advertising on the internet, whilst appearing to be on the increase again, is actually benefiting from a fallout in other areas of media adspend. As companies revise down their budgets for other marketing activities, so internet advertising commands a greater proportional share of marketing spend, rising from 1.8% in Q1 to 2.9% in Q2.
The most recent data gathered from marketing budget-setters shows that in Q1 2001, just over 40% of all the companies surveyed reported that they have raised their total marketing expenditure budgets for 2001, when compared with the estimated outcome for 2000 and only 21% reported cutting their budget.
In terms of media adspend, 25% of the advertisers surveyed reduced their media spend in 2000 whilst around 20% reported an increase. The declines in spending were more apparent for the April 2000 to March 2001 period than for the actual calendar year to date due to the Q1 2000 boom.
25% of advertisers reported having cut their advertising budgets in Q2 2001, citing economic unease both here and abroad as the key factor. As ad sales continue to decline so companies are reducing their media spend in what is manifestly a vicious circle. Only 16% of companies surveyed reported having upped their media adspend budgets in Q2 2001. The overall decline in media adspend this quarter continues the pattern which has developed over the past year, it is the second largest quarterly decline to date.
Breakdown of Revisions
| |
Q3 2000 |
Q4 2000 |
Q1 2001 |
Q2 2001 |
| Total marketing |
43.9 |
48.3 |
48.1 |
49.1 |
| Media adspend |
41.6 |
50 |
45.7 |
45.4 |
| Sales promotions |
50.3 |
50.3 |
47.7 |
49.3 |
| Direct marketing |
48.1 |
50.9 |
49.1 |
50.7 |
| All other marketing |
45.1 |
48.7 |
47.5 |
45.5 |
| (of which internet) |
57.1 |
55.6 |
53.1 |
57.9 |
Diffusion index, 50 = no change. An index reading above 50 indicates an increase on the previous year and below 50, a decrease.
The Bellwether Report, published quarterly by the IPA, tracks actual client spending intentions within the economy drawn from data generated by a panel of over 200 UK marketing professionals.
