IPA Bellwether Report: Optimism returns despite more marketing cuts
LONDON - Optimism is returning to UK marketing companies and budgets are set to rise in 2010, despite the ninth consecutive period of cuts in Q4, according to the latest IPA/BDO Bellwether Report out today (18 January).
Financial outlook: Bellwether report shows optimism returning
The IPA survey panel, made up of marketers at 300 leading companies, collectively presented the most upbeat financial outlook for their industries since the question was first asked in the second quarter of 2005.
Although this confidence dipped when it came to assessing the prospects of their own companies, 35% remained optimistic about the financial health of the industry in general, compared to 22% that were less upbeat.
Preliminary data also confirms that budgets have been set higher on average for 2010.
Such bullishness comes despite a quarter of respondents admitting to having made further cuts to their marketing spend in the last three months of 2009, compared to 18% that reported an increase.
The reductions confirm more than two years of budget cuts have now dogged UK marketers. However, the rate of the trimming is at its lowest since Q1 2008, well above the record lows seen in late 2008 and early 2009.
As always, contraction has not been universal or evenly spread, with budgets for internet advertising actually rising for the second quarter running.
Direct marketing budgets were also up in the last quarter of 2009, marking a distinct turnaround from the sharp reductions of this time last year.
But marketing spend was revised downwards across all other sales promotion, including PR and events, and for traditional media, with drops of 4.1% and 6.9% respectively.
Rory Sutherland, president of the IPA, said: "These findings are welcome, in that they show that the picture painted by the last Bellwether Report was not a false dawn."
The survey also appears to suggest the UK came out of recession during the last fourth quarter of last year, a claim yet to be supported by economic data, which is currently available up to Q3, when the economy shrank 3.1% at current prices.
The report states: "Optimism regarding financial prospects, for both industry and marketing executives' own companies, combined with the upward trajectory of PMI figures of late, suggest that it is highly likely that the UK economy emerged from recession in the final quarter of 2009."
This recovery claim echoes sentiments made by the National Institute of Economic and Social Research last week, which stated the UK economy expanded 0.3% in the final three months of 2009.
It is also in-line with CBI forecasts of 0.5% growth for the fourth quarter.
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