Marketing Spend Expected To Grow By 3% During 2004
Marketing spend is expected to increase by around 3% this year, but the economic recovery will not be as swift as first thought, according to new research from the Chartered Institute of Marketing.
The new survey supports a recent report from the Institute of Practitioners in Advertising, which suggests that a rising tide of corporate optimism could cause adspend to climb to levels not seen since the height of the dotcom boom (see Bellwether Reveals Increasing Optimism For Advertisers).
However, the latest Marketing Trends survey of more than 100 leading marketing professionals is more cautious in predicting a recovery. It casts doubts over the Government’s ambitious forecasts for economic growth during 2004 and reveals that the initial euphoria of the post-war Iraq period has been dampened.
Tess Harris, the CIM’s international chairman, said: “After nine months of violently fluctuating expectations, it appears that levels of confidence have settled down and now match those of mid-2002. The results indicate that we can expect a recovery, but it will not be as speedy as previously hoped.”
The survey shows that companies remain committed to increasing their marketing spend and are planning on sales growth of 5% in the coming year. More than a quarter of businesses expect to see an increase in the size of their marketing departments, whereas less than one in ten anticipate a reduction.
Harris said: “It is evident that firms have gained greater business confidence and believe that growth is achievable. However, they clearly understand the need to ensure that their financial position is firmly secured before they return to the heavy spending of the boom period.”
Andy Viner, a partner at BDO Stoy Hayward, added: “Our clients in the marketing and communications sectors are reporting increased confidence, which is reflected in a more optimistic outlook for the first half of 2004. However, any optimism should be tempered with caution; agencies are still facing margin pressure and recovery is likely to be gradual rather than dramatic.”
The UK advertising market looks set to pick up during 2004 and expenditure is expected to rise by 4.4% on average over the coming year, according to a consensus of recent forecasts complied by MediaTelINSIGHT.
Chartered Institute Of Marketing: 01628 427 500 www.cim.co.uk
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