British companies are increasing marketing budgets, but traditional advertising remains in the doldrums, according to the latest quarterly Bellwether Report from the Institute of Practitioners in Advertising and NTC Research.

Around 25% of the 200-plus UK firms surveyed revised their spending plans upwards, making Q2 the second consecutive quarter in which budgets have risen.

This uplift reflects a climb in below-the-line activity. Direct marketing was up for the third quarter in succession, with almost one in four respondents raising budgets. Sales promotion posted its first increase since Q4 2000, while internet marketing was lifted for the second Bellwether in a row.

However, spending plans for traditional media this year are down 2% from 2001.

IPA president Bruce Haines hailed the findings as “encouraging”, but acknowledged the reluctance to raise advertising budgets is a concern.

“Of course advertisers use direct marketing and sales promotion to retain existing business,” he said. “But to launch, relaunch or to grow a brand, media advertising is a central component of the marketing mix. In fact it's the only way to build brands fast and effectively.”

In addition, the survey estimates marketing spend for 2001 at £42 billion ($66bn; €65bn). Media advertising took the largest share (35%), followed by DM (26%), other marketing (24%) and sales promotion (15%).

Data sourced from: multiple sources; additional content by WARC staff