Insight Analysis: Bellwether May Show Slowly Returning Confidence
The confidence of marketers may be gradually returning in the UK, with more marketing budgets being revised upwards during Q2 than in any quarter since Q1 2000. This is one of the findings of the latest edition of the Bellwether Report published by the Institute of Practitioners in Advertising (IPA).
Marketing budgets When asked if pre-set budgets for the coming financial year have been increased, reduced or left the same in the last three months, a slight majority indicated that budgets have been boosted. However, as with the Q1 report, the vast majority of marketers were planning in the last three months to leave budgets unchanged.
In fact, the main movement over the two quarters has not really been toward positive increases, but rather away from budget reductions to leaving them flat, according to the figures.
In Q1, 22.5% of respondents planned to increase budgets; in Q2 this had risen by just 1.1% points to 23.6%. The percentage planning to reduce budgets, on the other hand, fell by 4.7% points from 19.9% in Q1 to 15.2% in Q2. This increases the majority who plan to leave spend the same from 57.6% to 61.2%.
| Revisions to current budgets | |||||
| ÂÂ | ÂÂ | ÂÂ | ÂÂ | ÂÂ | ÂÂ |
| ÂÂ | ÂÂ | % up | % same | % down | Net balance (+/- % points) |
| 2001 | Q1 | 19.1 | 57.9 | 23.0 | -3.8 |
| ÂÂ | Q2 | 18.0 | 62.1 | 19.9 | -1.9 |
| ÂÂ | Q3 | 17.9 | 53.8 | 28.3 | -10.4 |
| ÂÂ | Q4 | 19.0 | 48.5 | 32.5 | -13.5 |
| 2002 | Q1 | 22.5 | 57.6 | 19.9 | 2.6 |
| ÂÂ | Q2 | 23.6 | 61.2 | 15.2 | 8.5 |
| Source: IPA Bellwether Report, July 2002 | |||||
As with the Q1 report, these figures suggest that any boost to marketers’ confidence remains cautious, rather than bullish. The first two quarters of 2002 pretty much continue a trend of flat growth of budgets that occurred over the whole of 2001, when 32.6% increased spend and 32.6% decreased it.
Data on new budget setting, whilst available in the Q1 report, was not obtained in the Q2 figures.
Media budgets Figures for revision to media spend show an overall balance decline of 2.0% points in Q2. This is despite the fact that the percentage of respondents decreasing media spend actually declined from 20.4% to 19.0%. The balance drop is therfore the result of a shift of those planning to increase spend toward leaving it the same, as shown in the table and chart here.
| Media budget setting | |||||
| ÂÂ | ÂÂ | ÂÂ | ÂÂ | ÂÂ | ÂÂ |
| ÂÂ | ÂÂ | % up | % same | % down | Net balance (+/- % points) |
| 2001 | Q1 | 15.6 | 60.1 | 24.3 | -8.7 |
| ÂÂ | Q2 | 15.8 | 59.2 | 25.0 | -9.2 |
| ÂÂ | Q3 | 16.0 | 53.4 | 30.7 | -14.7 |
| ÂÂ | Q4 | 18.3 | 50.3 | 31.4 | -13.1 |
| 2002 | Q1 | 17.6 | 62.0 | 20.4 | -2.8 |
| ÂÂ | Q2 | 17.0 | 64.1 | 19.0 | -2.0 |
| Source: IPA Bellwether Report, July 2002 | |||||
Whilst media spend plans still show decline, the rate of decline has fallen for the third consecutive quarter in Q2. Nevertheless, this continuing decline in adspend budgets indicates an ongoing uncertainty over the end of the advertising downturn.
An analysis of the Q1 2002 Bellwether Report can be found Insight Analysis: Latest Bellwether Report Indicates Mixed Feelings.