Bellwether report suggest slower growth rate than previously predicted
The latest IPA/BDO Bellwether report has revealed that marketing budgets are not returning to the level they had been expected to in the early half of 2010.
The report reveals that marketing budgets were revised down in the second quarter during a period of uncertainty and that business confidence as also dipped.
Despite this, the report also finds that the rate of budgets being slashed has been slower than it was during the height of the economic downturn.
As a result of these findings the report predicts that marketing spend will still increase this year, but it is unlikely to do so at the rate predicted at the beginning of 2010, as the UK enters a phase of slower growth.
Most budgets across each marketing sector such as PR, events, below-the-line and sales promotion have been revised down, while the rate of growth for internet related budgets was the slowest for three quarters, while paid search budgets rose at a slower rate that it did in the first quarter of 2010.
Says Rory Sutherland, IPA President and vice-chairman of Ogilvy Group UK: “That we are seeing a more cautious approach to marketing spend compared to Q1 is not surprising due to the uncertain nature of our economy at the moment, and in the wake of the recent budget. However though this indicates a less optimistic picture than previously thought for this year, marketing spend is still set to increase.”
Andy Viner, head of media for BDO LLP, added that the report reveals that the second saw a cautious and uncertain picture.
“After a strong rebound in Q1, optimism and confidence appear to be waning, resulting in a slight downward revision to the rate of growth in marketing budgets compared to the start of the year. It is clear that there are increasing signs that uncertainty over economic prospects continue and that corporates remain focussed on cost control against a backdrop of the risk of a double dip. On a more positive note, certain areas of marketing spend such as internet advertising continue to grow, driven largely by technological factors such as the expansion in social media together with the desire of advertisers for increased measurability and accountability, and a lower cost of investment,” continued Viner.