NEWS18 October 2012

UK marketing spend dips but global index grows

Financials UK

GLOBAL — There was no Olympic halo effect for UK advertisers this summer because of the Eurozone crisis, but global confidence is on the up among advertisers, according to new industry figures.

The latest IPA Bellwether survey published today reveals that marketing budgets were revised down for a second successive quarter in Q3 to the greatest extent since the end of 2009. 23% of companies expect to reduce their marketing spend in the UK for the second quarter in a row.

In comparison, just 18% of marketing executives plan to increase spending, resulting in the sharpest downward revision since the end of 2009. These figures were backed by Warc’s latest Global Marketing Index (GMI) data, showing that Europe continues to record a negative outlook on marketing budgets, trading conditions and staffing levels, while the rest of the world showed positive signs of growth.

Around 31% of respondents to the IPA survey said they were pessimistic about their own companies’ prospects, versus 28% who are more optimistic.

This resulted in online budgets being the only media to be revised higher, with an increase of approximately 6%. Budgets for TV, print, radio and cinema were revised down by 6.4% over the next year.

The biggest cuts will be in PR, events and direct marketing, down 16% over the coming year.

The “disappointing” results come amid a tough trading environment and concerns over the global economic outlook and failure to resolve the Eurozone sovereign debt crisis.

“The message is one of underlying stagnation,” says IPA president Nicola Mendelsohn. “We had hoped when the year started that things were picking up, but as time has gone on the economy has stuttered and confidence isn’t particularly strong. Although this is disappointing, it is by no means terrible.”

Warc’s GMI, based on data from a panel of 1,225 executives, found that overall the global reading for marketing budgets hit 48.8 points in October, on a scale where 50 points reflects a neutral environment, and scores above this benchmark indicated an improvement.

At the regional levels, totals proved positive in the Americas, coming in at 53.8 points. Figures also rebounded in Asia Pacific, to exactly 51 points.