Global marketing budgets fall

23 August 2012

LONDON: Marketing budgets are declining around the world, with Asia Pacific and Europe witnessing the most substantial cutbacks, according to Warc's latest Global Marketing Index.

Based on data from a panel of 1,225 executives, the monthly reading for marketing budgets reached 46.1 points in August, on a scale where scores over 50 points show conditions are improving, and those below this benchmark reflect the opposite. (A more detailed report is available here.)

In reflection of the increasing pressure weighing on the sector, investment rates have dropped in eight of the 11 months since the first edition of the GMI was published.

The figure for August also constituted a decrease of 1.4 points compared with July, and was mainly driven by a downward trend across Asia Pacific, where totals fell by 4.7 points, to 46 points.

The situation remained largely unchanged in Europe, albeit on a highly negative 40.9 points. The Americas, by contrast, posted an improvement from 52.3 points to 53.5 points month on month.

Indeed, the region has stayed in positive territory on this measure since November 2011, in stark contrast to the considerable fluctuations seen in Asia Pacific and Europe.

"Marketers in Asia Pacific and Europe are reducing budgets," said Suzy Young, Warc's data editor. "In the months ahead, it will be interesting to see if the sudden dip for Asia Pacific is representative of a more deep-rooted downturn."

Looking at the allocation of marketing budgets by channel, digital is still in the strongest position, logging some 74.4 points, just ahead of mobile, on 69.2 points, clearly indicating the preference among brand owners for new media.

Traditional channels faced rather greater challenges, as press registered 34.1 points and radio yielded 41 points exactly. Outdoor fared slightly better on 44.7 points, with TV on 46.2 points.

Looking more broadly, the headline GMI – encompassing marketing budgets, staffing levels and trading conditions – stood at 52.4 points in August, compared with 51.3 points in July.

When assessing the business climate, global ratings came in at 54.4 points, a gain of 2.5 points month on month. The Americas had the best returns on 60.2 points, beating Asia's 54 points and Europe's 50.6 points.

Turning to corporate headcounts, the international figure was 56.6 points, with the Americas on 59.4 points, Asia Pacific on 57.7 points and Europe on 55.1 points.

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Data sourced from Warc; additional content by Warc staff