UK Marketers in Spending Mode

16 July 2007

LONDON: The Bellwether Report, a quarterly survey by the UK's Institute of Practitioners in Advert-ising of marketers' adspend intentions, shows surging confidence and an upward revision of budgets.

According to report author Chris Williamson of NTC Economics: "Marketing spend is clearly rising sharply, with growth in the second quarter boosted by a buoyant economy and strong profits growth, particularly in the service sector, where profitability is currently rising at the highest rate on record.

"There are certainly no signs from this survey that recent Bank of England base rate hikes have had an impact on business confidence.

"Importantly, increasing numbers of companies are investing in main media advertising to build brands and develop new products, which was reflected in the strongest upward revision to main media advertising budgets for seven years."

Highlights of the Q2 Bellwether include:

  • During the period 24% of companies reported increased total marketing budgets while 15% reported a decrease, so a net balance of 8.6%; the highest since Q1 2004.

  • The strong increase in main media spend (a net balance of 6.2%) reflected new product launches and higher internet marketing budgets - which outperformed all other sectors with a net balance of 21.8% of respondents reporting an increase.

  • Upward revisions to direct marketing budgets were reported by 18% of companies, while 12% reported budget reductions. 'All other' marketing (below-the-line activities such as PR, event sponsorship, cellphones) saw the fastest growth of all categories in 2006.

  • By sector, increases to budgets were most widely reported by service providers (especially IT, computing, travel and entertainment companies), and retailers. Budget trimming was most widely reported in the industrial and utilities sectors.
Amid this aura of cheer WPP Group ceo Sir Martin Sorrell is characteristically downbeat: "All very encouraging in a UK context," he observes, "but not so in comparison to the other geographic markets. The UK remains the laggard, with growth in China, India and Russia leading the way."

The report features original data from a panel of around 250 UK marketing professionals drawn primarily from the nation’s top 1000 companies. For further information on Bellwether click here.

Data sourced from IPA (UK); additional content by WARC staff