17 January 2011 - 10:48am | posted by | 0 comments

Bellweather report sees 5.4% drop in marketing budgets

According to the latest figures from the IPA/BDO Bellweather survey, marketing budgets were revised down for the fourth quarter of last year, dropping by 5.4%.

The fall in budgets is thought to be due to uncertainty surrounding economic recovery, with 22% of companies reporting a downward revisal, against the 17% that reported an increase, despite the third quarter of 2010 witnessing an increase in budgets of 0.5%,

Online advertising saw a slight increase in media spend, but this was at its lowest rate in six quarters, while direct marketing budgets were also rising at a lower rate than reported in the previous quarter.

Rory Sutherland, IPA President, and vice-chairman of Ogilvy Group UK (pictured), commented: “That these latest figures reveal a decline in confidence is disappointing, but characteristic of the uncertain climate we find ourselves in. At least we can draw comfort from those companies which reported an increase in spending in the last quarter of the year, and from indications that initial budget setting for 2011 is currently higher than actual 2010 spend.”

Andy Viner, head of media at BDO LLP, added: “The continuing economic uncertainty saw companies revise down their marketing budgets in Q4 at the strongest rate over the whole year in an attempt to preserve profitability and margins.

However the outlook for 2011 has started positively as budget setting for this year looks set to be higher than actual spend for 2010 with particular strengths in internet and direct marketing. We expect corporates to keep their marketing spend both flexible and cautious as they keep a sharp eye on consumer behaviour and wider economic indicators which is unsurprising given the backdrop of continued public spending cuts and the threat of rising interest rates.”

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