UK marketers plan to keep spending in 2010

19 January 2010

LONDON: A majority of companies in the UK will either increase or maintain their marketing budgets in 2010, according to the latest Bellwether Report, produced by BDO for the IPA.

The poll showed that 25% of firms reduced their adspend over the fourth quarter of 2009, while 18% reported increases, a "negative balance" of 7%.

This is the most positive spending sentiment recorded by the IPA since the first quarter of 2008, and represents a marked improvement from the negative balance of 15% delivered in the third quarter of last year.

The report further suggested that the direct marketing sector performed especially well over the fourth quarter of 2009, with a positive spending balance of 3%.

Search marketing, however, was the star performer overall, with a positive balance of 11.4%.

Rory Sutherland, IPA president and vice-chairman of Ogilvy Group UK, commented: "This latest report ... seems to bring particularly good news for direct and digital marketing activities, which seem to be leading the recovery."

Elsewhere in the survey, 37% of companies said their ad budgets would be higher in 2010 than they were in 2009, while one in four planned to spend less this year.

Almost half (42%) of firms also said they felt positively, rather than negatively, about their financial future.

The general improvement in trading conditions for marketers reflects healthier corporate balance sheets as the UK economy returns to growth.

While official GDP data for the fourth quarter has yet to be released, a survey from Britain's National Institute of Economic and Social Research has indicated that the economy expanded by 0.3% over the three-month period.

Meanwhile, a separate survey from the Ernst & Young ITEM Club saw quarterly growth of 0.4%.

Andy Viner, head of media at BDO LLP, said that firms are "re-thinking their budget allocation" for marketing at the moment.

He added: "Companies are continuing to seek cost effective and flexible options where the return on investment can be measured."

Debbie Klein, joint ceo of Engine, a new media agency, also said she had experienced a shift in the market over the course of 2009.

"Clients [are] wanting us to think about their business problem and use a tailor-made team with the right skills to solve it, rather than looking at it from the perspective of individual disciplines."

Data sourced from IPA/Bloomberg/Daily Telegraph; additional content by Warc staff.