Marketing spend is on the increase despite forecasts of a recession within the industry, according to the latest Bellwether Report. Twice as many companies raised their marketing spend than cut them in the first quarter of this year.
The report, which is published by the IPA and tracks actual client spending intentions within the economy, reveals that just over 40% of all companies reported an increase in their 2001 budgets compared to last year. This is double the number that reported a decline.
Bruce Haines, president of the IPA, said: “Everyone expected these figures to prove the UK was set for a downturn yet the picture is much more one of ‘steady as she goes’. The optimism about a second half recovery might actually have substance.”
He added that UK businesses have heeded lessons learned from the recession of the early 90s, when a lowering of marketing budgets often backfired. Today’s companies now recognise that less-then-perfect economic conditions often offer the cheapest time to win brandshare.
Hamish Pringle, director of marketing strategy at the IPA, detects a settling down within the sector following the dotcom frenzy of 2000. “Total ITV revenue for February 2001 was £143 million compared to £152m in 2000 and £141m in 1999 … this year, things are coming back into line and we may be seeing the start of Europe decoupling from the USA and Japan in terms of economic forecasting,” he said.
Advertisers spent 1.8% of their total budgets on the internet, the same figure as the final quarter of 2000. The proportion of budgets dedicated to direct marketing continued to show the greatest increase while money spent on new sales promotions showed the smallest increase during the quarter.
