LONDON: The final quarter of 2008 saw Britain's marketers slash their budgets by the greatest extent yet recorded by the Bellwether Survey, published by the Institute of Practitioners in Advertising in conjunction with Markit Economics.
Now in its ninth year, Bellwether provides a snapshot of UK marketing sentiment, based on advertisers' current spending plans. During Q4 2008, 49% of senior marketing respondents reported a decrease in their budgets; while a meagre seven per cent notified increases.
Other key data from the quarterly report include …
- 2009 Budgets
New budgets for coming year set lower for first time in survey history.
The survey also indicated that further weakness of marketing spend is likely as we move into the new year, as provisional data on initial budget setting for 2009 (based on approximately two-thirds of the survey panel) indicate that budgets have been set lower on average compared to estimated actual spend in 2008.
This is the first time in the survey's history that initial budgets have been set lower than the previous year. A lowering of budgets was reported by 45% of companies compared to just 20% reporting an increase.
- Business Confidence at All-Time Low
Current and future budgeted marketing spend were reduced in response to lower-than anticipated sales revenues and growing concerns about the economy.
Companies participating in the Bellwether survey reported that financial prospects for their own companies, and the industries in which they operate, deteriorated at a record pace.
Some 75% of companies reported that the financial prospects facing their industries had deteriorated compared to three months ago. Just 4% recorded an improvement.
- Media Posts Steepest Decline
Main media sees steepest decline, but even internet advertising fell in Q4.
Budgets for all main marketing activities were trimmed in Q4 as companies sought to cut costs, with main media advertising and the Bellwether's ‘all other' category again seeing the sharpest rates of decline, with record declines for each suggesting a loss of share.
Even internet advertising suffered a record reduction in spend, though the rate of decline was the least of all categories surveyed, therefore indicating a rise in share accounted for by online advertising (now estimated at almost 10% of all marketing spend).
The survey also suggested a shift in spend towards sales promotions, as companies offered price cuts to stimulate demand, as illustrated by pre-Christmas retail sales offering discounts of up to 70%.
The survey panel is selected to represent all key business sectors, drawn primarily from the nation's top 1000 companies.
Data sourced from IPA (UK) and Markit Economics; additional content by WARC staff