No let-up in UK marketing budget cuts

UK-- The latest Bellwether Report shows no let-up in marketing budget cuts – and research has not been spared.

The quarterly study of UK marketing budgets showed that spending fell faster in Q4 than at any time in the survey's nine-year history. It was the fifth consecutive quarter of cuts, with only 7% of companies surveyed reporting an increase, while 49% reported a decrease.

And the gloom looks set to last, with budgets for 2009 set lower than actual spending in 2008 – another first for the survey.

The ‘all other' marketing category, which includes market research, PR and events sponsorship, was hit particularly hard, with budgets down 32%. The only category that suffered worse in the last three months of 2008 was main media advertising.

Report author Chris Williamson told Research: “First and foremost companies are looking to cut costs, and where they are spending money, they're looking to direct it to activities that are price-related. They're recognising that in the next year they're going to need to offer as much value for money as possible. So there's a shift of spend towards sales promotions and other forms of marketing such as email, direct mail, internet advertising and search that are lower unit cost, very accountable and easy to turn on and off as the situation improves or deteriorates. The areas they're moving away from are main media, expensive brand building commercial campaigns and research into that sort of thing.”

Moray MacLennan, president of the IPA, said: “Given that marketing and creativity are the solution and not the problem, it will be interesting to see when the investment community starts to look favourably on those who maintain budgets and increase share of voice, as they are more likely to succeed in the future.”

The Bellwether Report is published by Markit Economics on behalf of the Institute of Practitioners in Advertising.

Author: Robert Bain

Related links:

UK Bellwether shows MR budgets ‘under pressure'

UK marketing budgets cut at fastest rate since 9/11, says Bellwether

UK marketing budgets continue to suffer in Q1