IPA’s Bellwether Report Signals Tentative Recovery
The IPA’s quarterly Bellwether report, published today, points to further signs of recovery in marketing spend with 25% of the 200 advertisers surveyed raising their current year marketing budgets during the second quarter of 2002.
The report, which looks at advertisers’ new budget setting, current budget revisions and actual marketing spend, shows that total marketing spend for 2001 across all companies, over both calendar and financial years remained unchanged at £33.5bn. However, since then business confidence has picked up and the net increase in overall marketing budgets between April and June 2002 is the strongest since the first quarter of 2000.
The IPA, which commissioned the report undertaken by NTC research, is keen not to overplay the improvement. IPA president, Bruce Haines, said: “It is encouraging to see that the first two quarters of 2002 show advertisers are increasing their marketing budgets after six quarters of decline. Nevertheless we are still concerned about their commitment to media advertising which is still weak, although an improvement on the six previous quarters.”
Media advertising (35%) accounted for the largest portion of the total marketing spend for 2001, followed by direct marketing (26%) and all other activity (24%). Sales and promotion accounted for 15% of last year’s total marketing spend.
The report also shows that direct marketing budgets were revised up between April and June 2002 for the third consecutive quarter. Sales promotion budgets were increased for the first time since the fourth quarter of 2000 and internet related activities were revised up for the second consecutive quarter.
Haines added: “Of course advertisers use direct marketing and sales promotion to retain existing business, but to launch, relaunch or to grow a brand, media advertising is a central component of the marketing mix. In fact it’s the only way to build brands fast and effectively.”
The Bellwether report paints a broadly positive picture of the UK’s beleaguered advertising market. However, earlier this month Zenith announced that it sees no prospect of a revival this year and predicted that world-wide expenditure will fall by 0.5% and by 1.7% in real terms before the start of 2003 (see Ad Recovery Still Not Imminent, Says Zenith Optimedia).
Further analysis of the Bellwether report will be available to MediaTel Insight subscribers later today.
IPA: 020 7235 7020 www.ipa.co.uk
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