Adland will be "no place for the faint hearted" in 2009 according to the latest IPA Bellwether report, which today revealed marketing budgets suffered record cuts in the final quarter of 2008.
The latest Bellwether report found that Q4 annual marketing budgets for 2009 were revised down to the greatest extent ever recorded in the survey's nine-year history. The cut was the fifth successive quarterly reduction in spend.
The IPA expects further cuts in 2009 and has already seen companies setting their initial budgets for the year ahead below 2008 levels of spend.
Budgets across all marketing disciplines were reduced last year, including internet advertising, which suffered a record reduction in spend but with the weakest rate of decline compared to other media.
Current and future spend has been reduced due to lower-than- anticipated sales revenues and growing concerns about the economy, according to the IPA, with 75% of companies believing that financial prospects facing their industries had deteriorated compared to three months ago.
Moray MacLennan, president of the IPA, said: "This Bellwether report suggests that adland in 2009 will be no place for the faint hearted. Confidence has plummeted and the data suggests a steep decline in GDP for Q1.
"Nevertheless, given that marketing and creativity are the solution and not the problem, it will be interesting to see when the investment community starts to look favourably on those who maintain budgets and increase share of voice, as they are more likely to succeed in the future.”
Chris Williamson, chief economist at Markit, the financial information service which compiles the Bellwether report, said: "The Bellwether shows an alarming rate of corporate retrenchment as the recession deepens, with spending on marketing being cut at a rate far greater than ever previously seen over the survey's nine-year history.
"Dissapointing sales in all sectors have also led companies to cut budgets for the year ahead for the first time since the survey began, suggesting there will be no quick return to growth for marketing spend."