UK industry moves from pessimism to optimism – but is it a swing too far?
UK— Researchers proved to be overly pessimistic in expecting budgets cuts for 2010 – but they are in danger of being too optimistic in their forecasts for the year ahead, according to a new ‘State of the Industry Survey’.
The research from RSM found the past year to be, by and large, better than expected. A net 6% of survey respondents reported an increase in budgets in the past 12 months, whereas an earlier survey found a net 28% expecting cuts.
For 2011, a net 26% of respondents say budgets will rise. Time will tell whether that proves to be accurate, but clientside respondents are less certain of growth than their agency counterparts. A net 16% of buyers anticipate cuts – although the expected decline in spend is fairly modest at 2.4%.
RSM partner Jon Madden notes that respondents to the survey have tended to overestimate the growth potential of budgets in eight of the nine waves of the survey – the exception being last year’s pessimistic turn.
He points to other results showing respondents to be generally more optimistic about their own company’s performance than that of the economy or the wider research industry, perhaps suggestive of a certain amount of “wishful thinking”.
Other divides are evident in the responses of the 279 supply side researchers and 37 clients who took part in the survey between September and October. Overall, respondents are the most concerned they’ve been about the public perception of the industry since RSM started asking the question three years ago, and the more experience they have in the business the more worried they are.
Newcomers, by contrast, are relatively optimistic about the state of the business – or at least they are more confident in its ability to adapt to technology and the needs of clients and consumers and continue to thrive.