NEWS12 July 2012

UK adspend and business confidence wanes amid uncertainty

Financials UK

UK— Marketing budgets and business confidence in the UK has waned in the second quarter of the year as the effects of the global economic downturn take their toll on consumer finances, according to the latest Bellwether report by the Institute of Practitioners in Advertising (IPA).

The downward revision is the first this year and is only marginal, with 23% of companies reporting a reduction compared to 22% that reported a rise. However, when marketers were asked for their views on the prospects fort the industry in which they operate, confidence fell sharply from a net 1% to -16.8%. The IPA says the slide “reflects in part the re-emergence of heightened uncertainty emanating from the escalation of the euro debt crisis.”

All traditional media spend was down for Q2, with sales promotions bucking the trend and showing the strongest rate of growth in nearly five years. Internet advertising also showed continuous growth in budgets.

Chris Williamson, chief economist at Markit and author of the Bellwether, said: “The focus has been on cutting back on main media advertising, direct marketing and below-the-line activities and reallocating that money towards sales promotions and the internet, both of which are often cited as means to quickly grow sales, especially in a downturn when customers are particularly cost conscious.”

It is hoped that the Olympics will provide a boost for the third quarter results.