Advertising & Marketing Hit Most By UK Business Downturn
The tough market conditions affecting UK business over the last year have hit advertising and marketing budgets more than other areas of expenditure, according to a new survey from Continental Research.
The report finds that two-thirds of the UK’s 1.1 million businesses have made cutbacks on their original spending plans over the past year, with 38% of advertising and marketing budgets affected. This compares to 21% reducing spending on training and 18% cutting back on wages.
Over two-thirds of companies have made some kind of spending cuts, ranging from research and development to building and refurbishment. The remainder said that they had made no cut-backs during the year, as shown.
“Large companies have concentrated their cutbacks on outsourcing and salaries and wages, suggesting a reduction in headcount, or fewer bonuses being paid. Small businesses meanwhile are more likely to be cutting spending on advertising/marketing and R&D,” says Colin Shaddick, director at Continental Research.
| Areas of reduced spending by size of company | ||||
| Company size | ||||
| Overall | Small | Medium | Large | |
| Advertising and marketing | 38% | 39% | 36% | 27% |
| Outsourcing and contractors | 28% | 29% | 25% | 30% |
| Research and development | 27% | 31% | 15% | 14% |
| Travel | 25% | 26% | 19% | 17% |
| Building and refurbishment | 23% | 22% | 26% | 23% |
| Training and conferences | 21% | 22% | 20% | 15% |
| IT and Telecoms | 19% | 18% | 22% | 17% |
| Salaries and wages | 18% | 17% | 23% | 26% |
| Any of these | 68% | 69% | 66% | 58% |
| None of these | 32% | 31% | 34% | 42% |
| Source: Continental Research, December 2002 | ||||