Traditional media budgets have been cut for the sixth successive quarter, with the IPA revealing the weakest rise in marketing spending in four years.
According to the latest Bellwether report from the Institute of Practitioners in Advertising (IPA), the overall trend in marketing budgets shows the continuing trend of moving adspend away from traditional media to direct marketing and the internet.
Indeed the IPA claim that expenditure on the internet in the first three months of 2006 was the highest it had been for two years, accounting for 4% of total adspend.
Direct marketing saw a marginal cut in current budgets for the first time in three years, but is expected to outpace all other Bellwether categories during 2006-2007.
Commenting on the report’s predictions, David Pattison, IPA President and chief executive of PHD, said: “The Bellwether report continues the trend of spend moving away from the traditional media areas towards the consumer engagement media of direct marketing and the internet.
“Whilst overall growth is predicted for 2006 this growth is at its lowest level since 2002. Consumer spending is slowing and this traditionally directly affects our industry. There is optimism that our industry will grow this year but it looks a limited in the current market conditions.”
Sir Martin Sorrell, chief executive of WPP, added: “The IPA Bellwether report confirms our experience. The UK remains one of the weakest geographical markets at the moment. But new media and new technologies are growing rapidly as clients experiment with different approaches and question the value of traditional media.”
The slow performance expected for the coming year is in line with predictions made in the last Bellwether, which claimed that growth was at the weakest rate since 2001, indicating that gross domestic product (GDP) growth is set to be downcast in early 2006 (see IPA Bellwether Predicts Rising Ad Budgets For 2006).
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