INSIGHTanalysis: IPA Sees Reduced Pessimism Despite Continued Cuts
Cautious optimism in the media and advertising markets has become ‘reduced pessimism’ in the latest Bellwether report from the IPA. The Q3 2003 survey shows that on the whole marketing budgets are still being cut, but by fewer companies than in the previous report* (see INSIGHTanalysis: IPA Report Shows Few Signs Of Marketing Improvement).
Revisions To Current Marketing Budgets | |||||
ÂÂ | ÂÂ | ÂÂ | ÂÂ | ÂÂ | ÂÂ |
ÂÂ | ÂÂ | % Up | % Same | % Down | Net Balance (+/- % points) |
2002 | Q1 | 22.5 | 57.6 | 19.9 | 2.6 |
ÂÂ | Q2 | 23.6 | 61.2 | 15.2 | 8.5 |
ÂÂ | Q3 | 14.9 | 61.7 | 23.4 | -8.5 |
ÂÂ | Q4 | 18.3 | 58.5 | 23.2 | -4.9 |
2003 | Q1 | 18.2 | 61.3 | 20.4 | -2.2 |
Q2 | 17.5 | 54.0 | 28.5 | -11.0 | |
Q3 | 18.3 | 60.1 | 21.6 | -3.2 | |
Source: IPA Bellwether Report, October 2003 |
Whilst the overall revisions remain negative, expenditure to the internet, direct marketing and sales promotion are all on the up. The proportion of advertisers allocating more than 10% of their budgets to online has risen from 4% to 7%.
“The ongoing growth rate for internet-related marketing is fantastic… The internet now accounts for almost 10% of total media consumption in the UK and there is considered room for further rises,” says the IPA’s ecommerce consultant Nigel Gwilliam.
Revisions To Current Marketing Budgets, By Sector, Q3 2003 | |||
Net Balance Of Responses (%) | |||
ÂÂ | Q1 2003 | Q2 2003 | Q3 2003 |
Total marketing | -2.2 | -11.0 | -3.2 |
Media adspend | -6.9 | -13.4 | -3.4 |
Sales promotion | -1.9 | -9.9 | 2.7 |
Direct marketing | 1.6 | -4.0 | 5.7 |
All other marketing | -1.7 | -8.7 | -7.8 |
of which internet | 18.3 | 5.8 | 13.5 |
Source: IPA Bellwether Report, October 2003 |
Media budgets Media advertising expenditure has been revised down, on average, for the last eleven quarters, according to the Bellwether. However, the net balance for Q3 2003 was just -3.4%, the lowest decline since Q2 2002. This leads to the IPA’s assessment of ‘reduced pessimism’ and concurs with recent market commentary indicating a slow improvement in advertising conditions (see INSIGHTanalysis: Media Healthcheck – September 2003).
“This Q3 report is in line with other cautiously optimistic industry forecasts and suggests that we will see firm signs of a recovery in marketing and advertising expenditures as we move into the new year,” says author Chris Williamson.
The report says that weak sales have led to cuts to total budgets or shifts in allocation of spend to others forms of marketing, notably direct marketing.
Revisions To Current Media Budgets | |||||
ÂÂ | ÂÂ | ÂÂ | ÂÂ | ÂÂ | ÂÂ |
ÂÂ | ÂÂ | % Up | % Same | % Down | Net Balance (+/- % points) |
2002 | Q1 | 17.6 | 62.0 | 20.4 | -2.8 |
ÂÂ | Q2 | 17.0 | 64.1 | 19.0 | -2.0 |
ÂÂ | Q3 | 13.8 | 62.1 | 24.1 | -10.3 |
ÂÂ | Q4 | 11.0 | 65.2 | 23.9 | -12.9 |
2003 | Q1 | 12.3 | 68.5 | 19.2 | -6.9 |
Q2 | 14.4 | 57.8 | 27.8 | -13.4 | |
Q3 | 16.1 | 64.4 | 19.5 | -3.4 | |
Source: IPA Bellwether Report, October 2003 |
* The figures in the Q2 2003 Bellwether have been revised slightly since its original publication. This is to incorporate late survey submissions from a number of key companies. The new, updated figures are shown in the tables in this report.