Marketing spend falls for ninth quarter

The latest IPA/BDO Bellwether survey published today (18th January 2010) reveals that marketing spend fell for the ninth quarter running in Q4 but with the rate of budget trimming the slowest since Q1 2008. Companies were the most optimistic about the financial outlook for their industries in almost five years — with 35 per cent of firms surveyed seeing improved prospects, consistent with growing confidence in the ongoing economic recovery. Budgets for 2010 have also been set higher on average compared to 2009 spend.

The survey further suggests that the UK emerged from the recession in the final quarter of last year.

By sector internet advertising budgets were revised up for the second quarter running. Direct marketing budgets were revised up for the first time since Q2 2007. Marketing spend was revised down across sales promotion, ‘all other’ (below-the-line such as PR, events), and main media but at a slower rate than the previous quarter. Although main media saw the sharpest reduction it was the least marked for seven quarters.

Rory Sutherland, IPA President, Vice-Chairman, Ogilvy Group UK said: “These findings are welcome, in that they show that the picture painted by the last Bellwether Report was not a false dawn. This latest report also seems to bring particularly good news for direct and digital marketing activities, which seem to be leading the recovery.”

Says Andy Viner, Head of Media, BDO LLP: “The survey results are good news for the marketing services sector. After nine consecutive quarters of reduced marketing spend, it appears that the rate of decline is at its slowest in nearly two years. There are a number of indicators to demonstrate that confidence is returning, with companies being upbeat about their own sectors and their corporate performance. Marketing budgets in 2010 are now set to grow, with companies re-thinking their budget allocation, for example, the spend in areas such as online advertising are due to increase significantly. Unsurprisingly, companies are continuing to seek cost effective and flexible options where the return on investment can be measured.”

Marco | Editor

Editor at large and founder of a bunch of stockphoto businesses