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Q1 2004 Bellwether Report shows continuing optimism for the new financial year

The Q1 2004 Bellwether Report, the quarterly survey of marketing budgets, published today (20th April 2004) by NTC Research on behalf of the IPA, continues to show improvements in business confidence, with budgets on average set higher than the previous year.


The Q1 2004 Bellwether Report, the quarterly survey of marketing budgets, published today (20th April 2004) by NTC Research on behalf of the IPA, continues to show improvements in business confidence, with budgets on average set higher than the previous year. 

Some 26% of companies reported upward revisions to current budgets, this being the second consecutive quarter where the number of companies reporting upward revisions exceeded those reporting a decrease. This growth was attributed to higher sales revenues and an associated improvement in profits. Whilst budgets for all main marketing activities were revised up in Q1, the sharpest rate of increase was recorded for internet marketing, followed by direct marketing and sales
promotion. Modest growth was reported for media adspend, the first recorded by the survey since Q1 2000.

Of those companies setting new financial year budgets for 2004-2005, 49% of companies reported that spend was due to rise in 2004-2005, this suggests a net rate of growth not seen by the Bellwether Report since 2000.

Looking at the various marketing activities covered by the Bellwether:

In contrast to the downward revisions reported for the past three years, current media advertising budgets were revised up, with fmcg and financial services showing the strongest upward revisions. Meanwhile one in three companies setting new budgets for 2004-2005 financial year reported an increase in adspend. This rise mirrors that reported by companies setting calendar year budgets in Q4 2003 and suggests that adspend growth will be greater than in the past two years.

Sales Promotion
Upward revisions were noted across all main business sectors for sales promotion budgets for the third quarter running, this was the largest since Q2 2002.  Budgets for companies with accounting years ending in Q1 were set higher on average than actual spend in 2003, with one in four firms reporting an increase.

Direct Marketing
Yet again direct marketing budgets were revised up on average in Q1 for the third consecutive quarter, this was the largest recorded by the survey and was the strongest of all categories tracked by the Bellwether Report. This suggests that direct marketing is gaining in popularity and will receive an increased share of total marketing spend.

Other Marketing Expenditure
For the second quarter in a row, current budgets for “all other” marketing were revised up with 17% of respondents reporting an increase and 14% reporting a fall. Of those companies setting new budgets for the new financial year, 35% set budgets higher than 2003 spend.

Internet Marketing Expenditure
Internet marketing has outperformed all other categories of marketing spend monitored by the Bellwether Report for eight consecutive quarters suggesting that there is a growing trend towards internet related marketing amongst panel members. One-in-three companies reported an upward revision to budgets whereas only 2% reported a decline.

Said Sir Martin Sorrell, Chief Executive WPP Group Plc: “The IPA Bellwether Report demonstrates yet again the recovery in advertising and marketing services spending in the UK.  This follows the trend we have seen elsewhere, but in a milder form. There are also indications that advertising and marketing services spending will stabilize or grow as a proportion of GNP in 2004. In addition, it appears that marketing services spending in direct internet and other more measurable areas is being favoured over classic media spending.”

Said IPA President and Chief Executive of WCRS Stephen Woodford: “The latest Bellwether Report suggests that the economic recovery which has been indicated in recent reports is becoming more firmly established. The current picture reflects the most positive climate across all sectors since Q4 1999.”

Said Bellwether’s author Chris Williamson of NTC Research: “The Q1 Bellwether survey provides further evidence to suggest that a revival in UK advertising and marketing spend is well underway. Companies reported that improved profitability - which returned to 2000 levels at the end of last year - and a bright outlook for sales in coming months encouraged not only a marked upward revision to current budgets but also an increasingly buoyant trend in budget setting for the year ahead.”

Said John Owen, IPA Digital Marketing Group Chairman and Planning Director of Dare Digital: “The trend towards online marketing continues unabated. There is no surer sign of the effectiveness of the medium than the fact that clients are investing more and more of their marketing budget in it.”

Said Jim Marshall, Chairman, IPA Media Futures Group: “Following a number of Bellwether Reports which have suggested a downward trend in media adspend, the more positive results of the most recent Bellwether are very welcome indeed.”

Said David Payne, IPA Head Direct Marketing: “The latest Bellwether Report reconfirms the trend which has been emerging in recent months which suggests that direct marketing is increasingly being favoured by marketers as an effective technique to communicate with their customers.” 

To order the IPA Bellwether Report telephone Markit on 01491 418 700 or email:  

Last updated 19/09/2008

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