Insight Analysis – Has The Bell Tolled For Ad Recovery?

The Bellwether Report from the IPA indicates that confidence among media and marketing professionals has declined in the last three months. However, the third quarter is traditionally seen as a time when spending levels are adjusted and the cuts were not as pronounced as in previous years.

Marketing budgets The survey found that while a majority of budgets remained unchanged, 23% of respondents implied that spending had been reduced compared to 15% who admitted to increases. The negative balance was the result of falling sales and profits and ongoing economic uncertainty. Nonetheless, statistics show that the downward revision was not as severe as that seen in the second half of 2001.

Current Marketing Budgets
		% Up	% Same	% Down	% Balance (Net +/-%)
2001	Q1	19.1	57.9	23.0	-3.8
	Q2	18.0	62.1	19.9	-1.9
	Q3	17.9	53.8	28.3	-10.4
	Q4	19.0	48.5	32.5	-13.5
2002	Q1	22.5	57.6	19.9	2.6
	Q2	23.6	61.2	15.2	8.5
	Q3	14.9	61.7	23.4	-8.5
Source: IPA Bellwether Report, October 2002

Media budgets Media advertising budgets showed an overall balance decline of 10.3% in Q3 with just 14% of companies increasing their spend. This represented the tenth successive quarter that a negative balance was recorded although the extent of the downgrade was less than in the same period last year.

Current Media Budgets
		% Up	% Same	% Down	% Balance (Net +/- %)
2001	Q1	15.6	60.1	24.3	-8.7
	Q2	15.8	59.2	25.0	-9.2
	Q3	16.0	53.4	30.7	-14.7
	Q4	18.3	50.3	31.4	-13.1
2002	Q1	17.6	62.0	20.4	-2.8
	Q2	17.0	64.1	19.0	-2.0
	Q3	13.8	62.1	24.1	-10.3
Source: IPA Bellwether Report, October 2002