Bellwether Report: Marketing budgets revised up in Q1
Q1 saw marketing budgets revised up for the first time in ten quarters, according to the latest IPA/BDO Bellwether survey, with around 21% of companies reporting a rise.
Companies are also upbeat about the economy, expecting the continuing recovery to gain momentum and planning to raise their spending for 2010.
Approximately 42% of marketing executives surveyed were more optimistic about the financial prospects for their company than they were three months previously, and 31% more optimistic for their industry.
Over a third of companies have set 2010 budgets higher than 2009 spend on average. This contrasts to last year with report data showing that spend fell for the second successive year in 2009, albeit at a slower rate than 2008’s record decline.
By sector main media budgets were revised up for the first time since Q3 2007. Internet budgets were adjusted up for the third quarter in succession, this upgrade was the most pronounced since Q1 2008 and the fastest of all categories.
Sales promotion and direct marketing budgets were unchanged, while ‘all other’ (below-the-line such as PR, events) was the only sector to record a downward revision to spend.
Last week, Magna released its upgraded 2010 growth forecast for UK media supplier ad revenues, predicting a 3% increase, up from its previous forecast of 1%.
Andy Viner, head of media, BDO LLP: “These results are a clear sign that renewed business confidence is translating in to real budget increases and tangible economic recovery. The last three quarters saw an increase in optimism without an increase in spending, but the survey shows that marketing budgets have been revised up for the first time in two and a half years so that they have finally caught up with business confidence.
“However, this should not be seen as simply a return to the good old days for all marketing disciplines, as spend on the marketing mix is changing. Businesses need to justify their increased budgets and maximise return on investment (ROI), so we have seen a rise in measurable internet marketing activities and moves away from areas such as below the line spend and sponsorship.
““This general shift in the marketing mix coupled with the rallying of media stocks in the first quarter of 2010 is an indication of renewed confidence in the marketing services sector and will provide opportunities for marketers who are prepared to embrace the new media landscape.”