4Q Bellwether Report shows mktg spend set to rise
The Bellwether Report, the quarterly advertising and marketing industry indicator which tracks actual trends within the economy, reveals in its fourth quarter report for 2000 that the number of companies increasing their total marketing budgets for 2001 outnumbered by well over two to one those cutting budgets.
On average, advertisers allocated almost one third of their total annual marketing budgets to media advertising. With advertising expenditure known to total £11.1 billion in 1999*, total annual marketing expenditure is therefore estimated at £33 billion. Internet-related spend represented 1.8% of total budgets in Q4, putting Internet-related annual marketing spend at an estimated £660 million.
In most cases, higher marketing spend in Q4 of 2000 reflected business expansion plans and increased brand building. However, although indicating robust growth of marketing spend during 2001, the overall rise in spend signalled was less marked than in the last quarter, suggesting a slight moderation of business confidence.
Just under half of all companies reported that they had increased their 2001 budgets compared to last year's spend, suggesting a significant rise in total media adspend this year. Just over 18% reported a decrease, reflecting belt-tightening following weaker than anticipated revenues in the second half of 2000.
"Marketing spend looks as if it will continue to grow this year albeit at a slower pace. Estimates for this year look positive," said Rupert Howell, President of the Institute of Practitioners in Advertising. "The Bellwether Report has now been in existence for a full year, and has fulfilled my expectations of it as a key leading indicator of the state of the UK economy."
Direct marketing spend was reported to have been boosted by a proportionally greater extent than media adspend or sales promotion spend. Some 40% of companies reported that their new budgets for direct marketing in 2001 were higher than estimated outcomes for 2000, while just 13% reported a decline. Advertisers reported that more funds had been made available due to strong sales, but also that direct marketing was set to take a larger slice of the total marketing pie as it was considered particularly cost-effective.
The Bellwether Report is a quarterly survey of marketing expenditure produced for the Institute of Practitioners in Advertising (IPA) by NTC Research. The Reports are based on a questionnaire survey of nearly 300 UK-based companies that have agreed to provide regular quarterly information trends in their advertising and marketing activities. The panel has been carefully selected to ensure that the survey data provide an accurate indication of actual marketing trends in the economy as a whole and includes a broad variety of advertisers in terms of company size, market sector and geographical location.
To subscribe to the Bellwether report please contact Markit on 01491 418 700, email
Bellwether costs £500 per annum (£375 for IPA members) for the report, £650 per annum for the data (£487 for IPA members) and £1000 per annum for both the report and data (£750 for IPA members).
The next Bellwether Report, covering the first quarter of 2001, will be published on 23 April.
* The latest figures for known full-year expenditure cover 1999. Source: Advertising.
Last updated 19/09/2008