Few Surprises In Bellwether Report
The IPA released its Q2 2001 Bellwether report today, drawing unsurprising conclusions about UK marketing spend. Leaving aside the much-discussed move away from television the IPA reveals a shift towards ‘below-the-line’ activities when decisions are made about marketing spend.
Bruce Haines, president of the IPA commented: “What this report shows is that advertising expenditure is settling back to its usual pattern of steady growth after the unusually high advertising expenditure we saw in 2000. The IPA believes that expenditures this year is going to be ahead of 1999, so averaging out over three years, expenditure in 2001 will represent respectable growth.”
Advertising on the internet, whilst appearing to be on the increase again, is actually benefiting from a fallout in other areas of media adspend. As companies revise down their budgets for other marketing activities, so internet advertising commands a greater proportional share of marketing spend, rising from 1.8% in Q1 to 2.9% in Q2. However, Haines stated that the internet is not a “flash in the pan”, saying: “Its a medium that is here to stay and is now larger than cinema.”
Haines continued: “What we’re seeing is clients holding back more of their budgets so they can react to changes in the economy, and more last minute deals.” Pointing to the 15% year on year reduction in the price of television advertising, he said: “Now is certainly a good time for advertisers. This time last year it cost around £90,000 to have an ad in the Coronation Street break, now its around £77,000.”
The most recent data gathered from marketing budget-setters shows that in Q1 2001, just over 40% of all the companies surveyed reported that they have raised their total marketing expenditure budgets for 2001, when compared with the estimated outcome for 2000 and only 21% reported cutting their budget.
In terms of media adspend, 25% of the advertisers surveyed reduced their media spend in 2000 whilst around 20% reported an increase. The declines in spending were more apparent for the April 2000 to March 2001 period than for the actual calendar year to date due to the Q1 2000 boom.
25% of advertisers reported having cut their advertising budgets in Q2 2001, citing economic unease both here and abroad as the key factor. As ad sales continue to decline so companies are reducing their media spend in what is manifestly a vicious circle. Only 16% of companies surveyed reported having upped their media adspend budgets in Q2 2001. The overall decline in media adspend this quarter continues the pattern which has developed over the past year, it is the second largest quarterly decline to date.
IPA: 020 7235 7020 www.ipa.co.uk
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