Advertising spending edges up at UK firms -survey

LONDON Thu Jan 19, 2012 12:04am GMT

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LONDON (Reuters) - British companies, motivated by a desire to protect market share and wary of the economic outlook, nudged up their marketing budgets in the fourth quarter, a survey showed on Thursday.

The IPA Bellwether report revealed a marginal increase in marketing spend -- with 20 percent of companies reporting an upward revision against 19 percent that reported a reduction -- lifting the spend for a second quarter in a row.

The report made clear, however, that the slight upward trend did not reflect improving conditions, as business optimism among marketing executives was at levels last seen ahead of the 2008 financial crisis.

"Marketing executives' confidence for the industries in which they operate has fallen to an 11-quarter low," it said.

"Additionally, executives reported that financial prospects for their own companies had deteriorated for the first time since first quarter 2009."

Initial data showed marketing budgets were set to rise in 2012 relative to 2011, but that the planned increase was weaker than in any year prior to 2009.

That may disappoint advertising groups which have said they expect 2012 budgets to be boosted by the London Olympics.

The report said the drop in business confidence would add to growing uncertainty around future growth in advertising markets.

Chris Williamson, the chief economist at Markit and author of the report, said the near-flat budget reflected similar stagnation in the overall economy.

He added there were also signs companies were increasingly reluctant to invest in traditional media campaigns, instead diverting money to the internet and direct marketing campaigns.

(Reporting by Kate Holton; Editing by David Hulmes)

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Comments (1)
DavidWood1 wrote:
The latest IPA Bellwether report isn’t all music to marketers’ ears but does suggest opportunity for greater creative invention with the promise of more marketing budget overall (against falling media spend). This will encourage a move away from using the same old traditional routes. More brands should commit to increasing their marketing spend, and give their agencies and partners more scope to invest this budget on both tried and tested methods, and more inventive approaches. Then, through this true collaboration the potential for sustained and dramatic business growth (which in turn unlocks even more budget for marketing) can be realised. Even a conservative increase in marketing budgets can be a catalyst for building a successful brand.
David Wood, founder of Iris Associates

Jan 19, 2012 4:01pm GMT  --  Report as abuse
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