The quarterly Bellwether Report from the Institute of Practitioners in Advertising, a survey of British marketing budgets, records the most optimistic outlook for advertising expenditure since the survey began in 2000.

Expenditure data builds on improved Q3 figures and are attributed to a better than expected sales environment. The sharpest rises in actual spend in 2003 were recorded for direct marketing and sales promotion.

Media adspend in contrast was unchanged on 2002 in real terms, although it continues to account for the lion’s share -- thirty-five per cent -- of total 2003 marketing expenditure.

Over half the 250 client companies that comprise the Bellwether panel set new annual budgets in Q3 and Q4, and over half reported that 2004 budgets have been set higher than actual spend in 2003. In contrast, lower budgets were reported by only one in five companies.

The breakdown of total marketing expenditure for 2003:

• Media advertising 35%

• All other (inc. PR and market research) 28%

• Direct marketing 23%

• Sales promotion 14%.

Commented IPA President Stephen Woodford: “The Bellwether Report is an accurate forecaster of actual marketing spends, so the strongly positive trends we are seeing will mean a real recovery for 2004.”

That view was endorsed by WPP Group chief executive Sir Martin Sorrell: "These UK trends are not surprising given that US fourth quarter 2003 corporate earnings look as though they will be up by 25%."

And Bellwether’s author, Chris Williamson of NTC Research, spelled out his reasons for optimism: “Marketing and advertising executives are entering 2004 in the most optimistic mood since the height of the dotcom boom. It is particularly encouraging that budget increases are being driven primarily by the reality of rising profits, growth of which recently hit a four-year high, rather than just by improved business confidence."

Bellwether, published today by NTC Research on behalf of the IPA, is based on a questionnaire survey of more than 250 companies recruited from the UK’s top 1000 corporations. It is available online from the WARC Bookstore.

Data sourced from: NTC Research; additional content by WARC staff