For the first time in two-and-a-half years, the IPA/BDO Bellweather Survey, which reports marketing spend, has risen.
The latest survey reflects the upturn in confidence from clients, with around 21% of companies reportedly increasing spend and 42% of marketing executives also believing that financial prospects are also expected to be healthier in the move towards economic recovery.
According to the report, over a third of companies have a higher budget for 2010 than they spent last year when 2009 saw spend fall for the second successive year.
Internet budgets were increased for the third quarter in succession, while sales promotion and direct marketing budgets were unchanged this quarter, with all other (below-the-line; i.e. PR and events) was the only sector to record a downward revision spend.
Rory Sutherland, IPA President, Vice-Chairman, Ogilvy Group UK, commented: "It's good to see that businesses are now increasing their investment in marketing as a route to growth - a welcome change in sentiment compared to this time last year. While online activities are leading the turnaround this year, the findings show that conventional advertising has now also turned the corner.”
Says Andy Viner, head of media, BDO LLP, added: “These results are a clear sign that renewed business confidence is translating in to real budget increases and tangible economic recovery. The last three quarters saw an increase in optimism without an increase in spending, but the survey shows that marketing budgets have been revised up for the first time in two and a half years so that they have finally caught up with business confidence.
“However, this should not be seen as simply a return to the good old days for all marketing disciplines, as spend on the marketing mix is changing. Businesses need to justify their increased budgets and maximise return on investment (ROI), so we have seen a rise in measurable internet marketing activities and moves away from areas such as below the line spend and sponsorship.”
Viner continued: “This general shift in the marketing mix coupled with the rallying of media stocks in the first quarter of 2010 is an indication of renewed confidence in the marketing services sector and will provide opportunities for marketers who are prepared to embrace the new media landscape.”