Business: Bellwether Report - ISP seeks clarity on IPA's definition of SP

by Gemma O'Reilly, Promotions & Incentives 14-Dec-06

The Institute of Sales Promotion (ISP) is to continue putting pressure on the Institute of Practioners in Advertising (IPA) to clarify the way it defines sales promotion for its Bellwether report, after the latest findings revealed static SP budgets for the third quarter of this year.

The report, which is published quarterly and quantifies marketing spends within disciplines including SP, DM, online and experiential, reported SP budgets were left unchanged on average in Q3. It showed that the 12 per cent of companies reporting upward budget revisions were offset by an equal number that posted downward revisions.

According to Clive Mishon, the ISP's marketing director, this presents an inaccurate picture of the state of SP: "The SP industry is beginning to see an upturn, but the Bellwether guidelines are too narrow. Promotion is alive in all media channels and this must be represented in the report.

Experiential should fall more clearly within SP and so should some elements of direct marketing," he insisted.

However, while IPA director general Hamish Pringle has met with Mishon to discuss the report parameters, to date he has refused to change them.

"We have to blur the boundaries otherwise nobody will respond to the survey," said Chris Williamson, Bellwether Report author at NTC Economics.

He admitted: "The report is imperfect but gives an overall outlook on the industry."

Budget increases in Q3 were most common in the FMCG, retail and consumer durables sectors, while cuts were reported in the financial services, automotive and industrial utilities sectors.

The report forecasts that 2006 is likely to see little improvement on the record drop in budgets seen in 2005. Last year saw SP expenditure fall at the steepest level in the history of the survey, reversing 2004's rise. The survey suggests that SP spend in 2006 will be modest at best and may even show a decline for a second consecutive year.

The ISP wants to better educate marketers who contribute to the report to recognise that any call to action in marketing to build sales is sales promotion. It also wants to involve other trade bodies in finding a clearer definition of the category.