The latest Bellwether Report from the Institute of Practitioners in Advertising (IPA) reveals that whilst marketing budgets have stalled in the second quarter of 2010, interest in digital marketing continues to drive spend upwards.
The Bellwether report is published annually by the IPA and is considered a key measure of the health of the marketing and advertising industry. It’s last iteration, covering the first three months of 2010, saw a dramatic increase in UK marketing budgets. For the first time since the recession, more UK companies raised than marketing budgets than cut them.
In the latest report though, the only trend that has been sustained from the first three months of 2010 is an increase in spend on digital activity such as search engine marketing or display/banner advertising. Nearly all of the companies in the report showed an increase in internet marketing spend, though a lower rate than seen in the past three quarters.
Across the sector as a whole however, 20% of companies say that they have cut their annual advertising budget between April and the end of June, whilst only 15% said that they increased spending during this period. The report finds that “positive sentiment” among the marketing industry has dropped to its “lowest for a year”, with a quarter of respondents negative about their company’s financial prospects.
On closer analysis, the pessimism may be somewhat exaggerated. Internet marketing remains strong whilst traditional media such as TV, press and radio has only suffered “very modest” downward budgetary revisions in the second quarter. However this may change in the third quarter as events such as the world cup will no longer be able to boost ad spend.
Sales promotions were the worst hit sector in the report though, which recorded the third fastest drop on spending on sales promotion in the survey’s history.
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