The latest Bellwether report for the first quarter of 2007 has just been released, recording the strongest upward revision of UK marketing spend for three years.
The report, from the Institute of Practitioners in Advertising, says that one in four companies is now reporting an upward revision to total current marketing budgets.
In Q1 2007, 24% of companies taking part in the report increased their total marketing budgets, whilst 16% reported a decrease. This left a net positive balance of 7.7%.
The report also shows that 54% of companies have set their 2007 budgets higher than for their actual spend in 2006, with just 17% reporting a budget reduction.
The 37% net increase in marketing budgets is the strongest in seven years.
Online advertising now accounts for £2 billion of marketing spend per year, with the Bellwether report showing that 19% of companies reported an increase.
A recent forecast from ZenithOptimedia said that global internet adspend will overtake radio in 2008, a year earlier than it forecast in December (see Internet Adspend To Overtake Radio).
Meanwhile, the Internet Advertising Bureau issued a report which showed that UK internet advertising expenditure grew 41% in 2006, breaking the £2 billion barrier (see UK Internet Advertising Spend Grows 41%).
According to the IPA Bellwether report, traditional media, which includes press, television, radio, cinema and out-of-home, saw a net increase of 2.5%, its first upward revision in spending for two and a half years.
Sir Martin Sorrell, chief executive of WPP, said: “The IPA Bellwether report, once again, reflects what WPP is seeing in the UK -a recovery against, admittedly, weak comparables, with the spending increase being dominated by expansion in direct, internet and interactive media.
“The UK mirrors what is happening in western continental Europe. Direct internet and interactive spending, however, still lags consumer use of such media, with consumers spending reportedly 20% of their time online.”
David Pattison, IPA president and chief executive officer of i-level parent company ILG Digital, said: “The first quarter 2007 Bellwether Report is a very encouraging sign for almost every part of our industry.
“Our clients seem to have found both confidence in the economy, and the strength to compete, to plan increased marketing support across the board.”
| Revisions To Current Marketing Budgets, By Sector, Q1 2007 |
| |
Q1 2006 |
Q2 2006 |
Q3 2006 |
Q4 2006 |
Q1 2007 |
| Total marketing |
-6.2 |
-1.6 |
2.6 |
-0.7 |
7.7 |
| Media adspend |
-15.8 |
-7.5 |
-1.1 |
-2.9 |
2.5 |
| Sales promotion |
-6.6 |
-7.5 |
0 |
-5 |
0 |
| Direct marketing |
-0.8 |
0.9 |
10.1 |
4.1 |
0.6 |
| All other marketing |
-11.9 |
-5 |
2.4 |
-2.9 |
2.5 |
| of which internet |
25.8 |
24.4 |
24.1 |
31.5 |
19.3 |
| Source: IPA Bellwether Report, April 2007 |
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