Insight Analysis: Internet Remains A Very Small Proportion Of UK Marketing Budgets

In the last three months internet marketing budgets for the current financial year have been revised upwards by 16.9% of those marketing executives questioned by the survey. A vast majority of 79.1% said they were leaving their internet budgets unchanged, whilst just 4.1% have revised them downwards. This gives a net balance of +12.8% – the highest since Q2 2001.

Revisions To Current Internet Budget
		% up	% same	% down	Net balance (+/- % points)
2001	Q1	15.7	74.8	9.4	6.3
	Q2	24.8	66.2	9.0	15.9
	Q3	14.9	71.6	13.5	1.4
	Q4	13.8	71.0	15.2	-1.4
2002	Q1	13.3	74.2	12.5	0.8
	Q2	16.9	79.1	4.1	12.8
Source: IPA Bellwether, July 2002

No year on year growth in Net budgets Whilst Q2 may see more marketers increasing their budgets than decreasing them, the trend year on year shows little real budget allocation increase. The main increase when compared to Q2 2001 is actually in setting internet advertising and sponsorship budgets to zero, as shown.

The trends since Q1 2002 show that there was a peak in less than 0.1% of budgets being allocated to the internet in Q1 this year, with a corresponding fall in the percentage of marketers designating no budget to the web. This suggests a flirtation with internet marketing on a very small scale, which seems to have been reigned back in this quarter.

The 0.5-1% of budget band has slumped from just under 30% of marketers in Q1 2001, to only 10.2% in Q2 2002. Meanwhile, the 5-10% band has grown a little over the same period.

The trend data seem to indicate that there is little overall increase in the proportion of marketers’ budgets allocated to the internet, despite the headline Q2 finding that more are increasing their spend than decreasing it. On average, the internet accounts for slightly over 2% of total marketing spend.

Looking only at Q2 2002, the majority of marketers – 28.7% – are still budgeting for no spend on the Net whatsoever. The next largest category is the 1-5% budget allocation, into which 21.6% of marketers fall.

Percentage Of Marketing Budget Set For Internet Advertising Or Sponsorship
		Zero	<0.1%	0.1-0.5%	0.5-1%	1-5%	5-10%	10-15%	15-20%	>20%	Don’t know
Proportion of companies
2001	Q1	30.4	14.3	9.9	29.8	8.1	0.6	1.2	3.1	2.5	0.0
	Q2	22.2	18.4	13.9	8.9	20.3	7.6	3.2	2.5	3.2	0.0
	Q3	24.6	17.5	8.2	11.7	18.7	9.9	2.9	1.8	2.3	2.3
	Q4	25.5	14.9	13.7	6.2	23.6	9.9	0.6	1.2	3.1	1.2
2002	Q1	15.2	26.5	13.9	8.6	19.9	8.6	2.6	1.3	1.3	2.0
	Q2	28.7	13.8	13.2	10.2	21.6	7.2	1.8	0.6	3.0	0.0
Year On Year Change Q2 2002		6.5	-4.6	-0.7	1.3	1.3	-0.4	-1.4	-1.9	-0.2	0.0
Source: IPA Bellwether, July 2002