NEWS21 December 2001

Marketing outlook worsens

Budgets are being cut for all marketing activity according to the latest poll of members by the Chartered Institute of Marketing.
Business confidence has reached a record low according to the CIM’s most recent quarterly trends survey. Expected sales growth for the coming year is the lowest it has been since the CIM started sampling member opinions in 1994.

Although MR has been affected by the current turbulence in the economy, the value companies attach to research seems to have shielded agencies from the worst effects of the downturn. “There clearly has been a knock-on effect for research but some clients are using more research because they want to be sure they make the right decisions,” commented Gordon Pincott, head of client services for Millward Brown.

“The pressures inside marketing companies are increasing immensely and there are a lot of departments where people are fearing for their jobs. We are doing more pre-testing than before. Clients are nervous. They want to make sure that they have it right.”

Leslie Sopp, chair of Association of Users of Research Agencies, was cautious about pronouncing economic gloom for the research industry. “There is a shift down and it is palpable on the basis of what we read and some of it may be set in specific sectors. I don’t know how deep this goes.”

Agencies should promote the value of research in these difficult times, said Colin Buckingham, CEO of Research International. “We have to have the confidence to say to clients that we can help them maintain their brand and develop new business,” he said. “We can help clients innovate through the recession.”

Not all sectors are feeling pessimistic. Retailers have upgraded their forecasts, cheered by continued consumer spending.

The end of the downturn may be in sight for the advertising industry. The Zenith Optimedia report, one of the most respected indicators of economic growth in advertising, predicts the UK ad market to continue its decline in 2002 but only by 1.4% with spending to stabilise at about £10.5bn annually in 2003 and 2004.