IPA Bellwether Report: Down But Not Out
The IPA’s quarterly Bellwether report, published today, has dampened hopes for a swift recovery in marketing spend, with the majority of companies revising their marketing budgets down during the fourth quarter of 2002.
The report, which looks at advertisers’ new budget setting, current budget revisions and actual marketing spend, shows that total current marketing budgets were revised down on average for the second consecutive quarter. However, the drop was not as steep as that reported in the third quarter of 2002 and was also less pronounced than that recorded in the fourth quarter of 2001.
Direct marketing and sales promotion were the only two disciplines to increase their share in the fourth quarter. Direct marketing extended its share by 1% point from the previous quarter to 27% and sales promotion was also up 1% point to 16%.
Media adspend, which still accounts for the largest proportion of marketing budgets, saw its share fall from 35% in 2001 to 33%, while other marketing activities, which includes PR and sponsorship, slipped 1% point to 23%.
However, the report also suggests that the industry may be turning a corner, as the number of companies said to be increasing their budgets for 2003 outnumbered those reporting a reduction by two to one. This improvement in total marketing spend is the strongest since the fourth quarter of 2000.
Commenting on the findings, Bruce Haines, president of the IPA and group chairman of Leo Burnett, said: “Continued economic uncertainty both at home and abroad together with disappointing consumer spending in the fourth quarter has led many to cut their marketing budgets in an effort to reduce costs.”
He added: “This being said, new budget setting for 2003 signals some positive growth with over half of those surveyed increasing their marketing budgets in 2003 in real terms.”
Further analysis of the Bellwether report will be available to Media Tel Insight subscribers tomorrow.
IPA: 020 7235 7020 www.ipa.co.uk
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