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INSIGHTanalysis: UK Marketing Spend On The Rise

INSIGHTanalysis: UK Marketing Spend On The Rise

The IPA‘s latest Bellwether report has added weight to the belief that advertising and marketing conditions are picking up. The outlook for expenditure growth is at its most optimistic since 2000.

The Q4 survey shows the majority of existing budgets to have remained relatively unchanged in the past three months. However, the proportion of marketers who have upwardly revised spend has grown from 18.3% to 23.4% while just 14.1% have reduced budgets. This produces a net balance of 9.4%, the first average upward revision since Q2 2002.

All the major categories benefited from the increase but there were only modest gains for the FMCG, media and travel sectors.

Revisions To Current Marketing Budgets 
           
      % Up  % Same  % Down  Net Balance (+/- % pts) 
2002  Q3 14.9 61.7 23.4 -8.5
  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
  Q4 23.4 62.5 14.1 9.4
Source: IPA Bellwether Report, January 2004 

Media budgets Current media advertising budgets were revised down on average in the last quarter, but only slightly. Indeed, the downward adjustment was the smallest recorded since Q4 2000.

Less than one in six companies reported the need to cut budgets but upward movement proved equally rare.

Revisions To Current Media Budgets 
           
      % Up  % Same  % Down  Net Balance (+/- % pts) 
2002  Q3 13.8 62.1 24.1 -10.3
  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
  Q4 14.4 70.7 14.9 -0.6
Source: IPA Bellwether Report, January 2004 

Other marketing budgets Of those companies setting new marketing budgets for 2004, 53.5% reported that spend had been set at levels above those in 2003. However, although marketing expenditure is on the increase, this can be largely attributed to non-media areas.

Sales promotion, direct marketing and other sectors all made gains in the fourth quarter and one in four companies reported an upward revision in internet-related marketing spend.

Revisions To Current Marketing Budgets, By Sector, Q4 2003 
       
  Net Balance Of Responses (%) 
  Q2 2003  Q3 2003  Q4 2003 
Total Marketing -21.0 -3.2 9.4
Media Adspend -13.4 -3.4 -0.6
Sales Promotion -9.9 2.7 2.0
Direct Marketing -4.0 5.7 10.8
All Other Marketing -8.7 -7.8 2.3
of which internet  5.8 13.5 21.3
Source: IPA Bellwether Report, January 2004 

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