The report, which gauges the opinion of more than 200 of the UK’s top advertising agencies, shows that the cuts in budgeted spend were largely due to falling sales, deteriorating profits and an increased uncertainty both at home and abroad.
Commenting on the findings, Bruce Haines, president of the IPA and group chairman of Leo Burnett, said: “These figures do suggest that the industry still has a way to go; however we have seen from previous Bellwether Reports that Q3 is traditionally a time when many marketers revise their budgets down.”
Direct marketing and internet-related marketing continued to show prosperity and were revised up marginally during the third quarter of this year. However, the report shows that internet-related marketing spend fell as a proportion of total marketing spend, with those companies allocating no marketing spend to internet-related activities rising to 29%.
Sales and promotion budgets were revised down again in Q3 2002 after having been revised up for the first time in six quarters in Q2 2002. According to the IPA, the decrease reflects a cut in the overall budgets rather than a shift to other media.
All other marketing budgets were also revised down in Q3 after having been revised up for the first time in two years during Q2 2002. In the majority of cases the downward revision reflects cost cutting in the face of weak sales.
Haines added: “The evolving situation with Iraq and the state of some euro-zone markets will play largely into the business decisions of many UK marketers both this quarter and next. Good news however, is that television has seen growth for a consecutive 5 months and BACC figures show that on last year we are up 24% in the number of television commercials created, which has certainly got to be a positive sign for the industry.”
