Adspend appears to be holding up well in the wake of the economic downturn, judging by the quarterly Bellwether Report of marketing expenditure produced for the Institute of Practitioners in Advertising by NTC Research.
In the newly released study for Q3 2001, nearly twice the number of advertisers planning to reduce next year’s adspend intend to raise it. Around one-quarter of the 200-plus surveyed companies set their ad budgets for 2002 in Q3 – of these, 42% will spend more in real terms than at present, while 23% will reduce expenditure.
Such optimism is surprising, given that the survey was conducted between September 13 and October 2, straight after the terrorist attacks on the US.
However, IPA president Bruce Haines warned the IPA was expecting “much more depressing news,” continuing: “Nobody knows the impact of the events of September 11 but those companies in trouble before that date have obviously had their problems exacerbated.”
Nevertheless, Haines said a recovery in the first half of 2002 seemed more probable than it did over the summer. “[The report] confirms our feeling that many clients are writing off this year and are tentative about next year, but on the whole are taking a more positive than negative attitude towards 2002.”
Adspend cuts were most frequent among companies in the finance, travel/transport and media/entertainment sectors, whereas those in retail and fmcg areas tended to plan budget increases.
Many companies are shifting spend from traditional advertising to direct marketing and sales promotion. Nearly 46% of companies surveyed by the report intend to increase DM expenditure, seen as a cheaper and more accountable medium than TV.
Online adspend was revised up by the smallest figure in the Bellwether’s history, while net growth in expenditure on ‘all other’ marketing (excluding advertising, DM and sales promotion) was the lowest since the survey began.
“Behind these figures lies a complex picture – a fundamental change in media mix, a certain amount of caution, a reflection of the year’s activities and perhaps also a reaction to the events of 11 September,” continued Haines.
“They show a significant redistribution of marketing spend as well as those tactical decisions taken by cautious companies in the third quarter of the year … What we don’t know is whether they’ve revised their budgets down because of savings they've already made on lower media rates, or whether they are having to redistribute their marketing budget elsewhere.”
News sources: MediaGuardian.co.uk; IPA website