More Of The Same, Says The Latest IPA Bellwether Report
The latest Bellwether Report from the IPA reveals that almost twice as many companies surveyed setting marketing budgets in Q4 2001 reported an increase on spending (compared to 2001 totals) than a decrease. The majority of those surveyed opted to keep budgets on a similar scale to those set for 2001, particularly when it came to media advertising expenditure.
| Media Advertising Expenditure Changes | ||||
| New Budget Setting | ||||
| % Up | % Same | % Down | % Balance (Net +/-%) | |
| 2001 Budget Set in Q4 2000 | 40.4 | 37.7 | 21.9 | 18.5 |
| 2001 Budget Set in Q1 2001 | 34.9 | 38.1 | 27.0 | 7.9 |
| Question Not Asked In Q2 | ||||
| 2002 Budget Set in Q3 2001 | 35.3 | 35.3 | 29.4 | 5.9 |
| 2002 Budget Set in Q4 2001 | 33.3 | 38.2 | 28.5 | 4.9 |
| Revisions To Current Budgets | ||||
| % Up | % Same | % Down | % Balance (Net +/-%) | |
| 2000 Q3 Revision | 14.4 | 54.5 | 31.1 | -16.8 |
| 2000 Q4 Revision | 19.0 | 61.9 | 19.0 | 0.0 |
| 2001 Q1 Revision | 15.6 | 60.1 | 24.3 | -8.7 |
| 2001 Q2 Revision | 15.8 | 59.2 | 25.0 | -9.2 |
| 2001 Q3 Revision | 16.0 | 53.4 | 30.7 | -14.7 |
| 2001 Q4 Revision | 18.3 | 50.3 | 31.4 | -13.1 |
| Actual Media Advertising Spend Growth | ||||
| % Up | % Same | % Down | % Balance (Net +/-%) | |
| 1999 Financial Year | 30.7 | 45.3 | 24.0 | 6.7 |
| 2000 Financial Year | 12.9 | 62.9 | 24.3 | -11.4 |
| Source: IPA Bellwether Report, January 2002 | ||||
In terms of total marketing expenditure, 40% of companies surveyed who had revised their budgets in Q4 increased spending on the previous year although one in five revealed a reduction in spending. Current budgets were revised down by almost one in three companies in Q4 with only one in five reporting an upwards revision.
Financial services, travel and IT sectors continued to suffer whilst retail, consumer and business services reported the greatest gains.
Media advertising expenditure faired reasonably well with over 30% of companies surveyed who set new budgets in Q4 pledging increased spending. However, only 4% fewer companies setting new budgets reported a decline in spending. The IPA claims that the data “data suggest that media adspend will rise in 2002, growth is likely to be restricted as companies continue to exercise caution in boosting expenditure, in many cases citing a preference for other forms of marketing.”
Of those companies revising current budgets in Q4, the proportion of downward revisions exceeded the proportion of upward revisions by just 13%. Unsurprisingly the downward revisions were blamed on cost cutting measures imposed in the face of an ever declining market. The decline was measurably less than for Q3 reflecting buoyancy in the retail, FMCG and consumer durables market – no doubt boosted by Christmas spending.
The Bellwether Report, published quarterly by the IPA, tracks actual client spending intentions within the economy drawn from data generated by a panel of over 200 UK marketing professionals.