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Direct marketing budgets revised down

Direct marketing budgets were revised down in the first quarter of 2012 for the first time since the corresponding quarter of 2011, according to the latest IPA Bellwether report.

Direct marketing: budgets revised down in the first quarter of this year

Direct marketing: budgets revised down in the first quarter of this year

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A net balance of 3.2% of companies revised down direct marketing budgets, while the reading for overall budgets was marginally up.

Cuts to direct marketing spend were principally attributed to shifts in spend towards internet advertising.

The report also showed that actual spend on direct marketing in 2011 rose for the first time in four years, based on provisional data.

Mel Cruickshank, chair of the IPA's Direct Marketing group and chief executive of Lida, said: "It’s great to see confidence starting to return to the market. It’s particularly good news that actual spend was up for the first time in four years in direct marketing in 2011, confounding last years predictions.

"I’m cautiously optimistic about 2012, and whilst it’s likely that the shift of traditional media budgets to digital will continue, I feel that the industry is well placed to respond to the challenge."

Analysis of marketing budgets by medium for Q1

Media spend trends continued with traditional media budgets cut by 2.7 per cent, while internet adspend grew by 7.8%.

Revisions to total marketing budgets

Client confidence in their own company prospects jumped dramatically to the highest levels in two years, with around 38% of marketers more upbeat than they were three months earlier.

Marketing executives business confidence

Despite the rise in confidence, companies remain cautious, planning to increase their budgets by 7% for the new accounting year, the lowest predicted rise in three years.

Nicola Mendelsohn, the IPA president, said: "There is no doubt that key events such as the London 2012 Games and the Queen’s Diamond Jubilee will do much to ensure that marketing spend continues to rise."

Follow Daniel Farey-Jones on Twitter @danfareyjones

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