The Q3 2002 Bellwether Report, the quarterly survey of marketing budgets, published today (15th October 2002) by NTC Research on behalf of the IPA, shows that clients have revised their marketing expenditure down, although not as severely as in Q3 2001.
The Q3 report, which this quarter focuses on revisions to current budgets, reveals that:
There have been substantial downward revisions to budgets every third quarter since the survey began in May 2000.
Total marketing budgets were revised down in Q3, although, the extent of the downward revisions were less than seen at the same time last year. The cuts in budgeted spend were blamed on falling sales, deteriorating profits and an increased uncertainly with regard to the economic climate both at home and abroad.
Media advertising budgets were revised down on average in Q3 although the scale of the revision was less than same time a year ago. Weak sales and economic uncertainty were both cited as key factors restraining adspend growth.
Direct marketing and internet-related marketing spend were revised up in Q3, although only marginally.
Internet related marketing spend, although revised up, fell as a proportion of total marketing spend with those companies allocating no marketing spend to internet-related activities rising to a six quarter survey high of 29% in Q3. Also a simultaneous survey low was seen in the proportion of companies allocating in excess of 20% to internet related activities, which dipped to just 0.5%.
Sales promotion budgets were revised down again in Q3 after having been revised up for the first time in six quarters in Q2 2002. The decrease reflects a cut in overall budgets rather than a shift to other marketing media.
All ‘other marketing’ budgets (that include PR, conferences, sponsorship, corporate hospitality, entertainment, and e-commerce) were revised down in Q3 after having been revised up for the first time in 2 years during Q2 2002. In the majority of cases the downward revision reflects cost cutting in the face of weak sales.
Said Bruce Haines, Group Chairman of Leo Burnett and President of the IPA: “These figures do suggest that the industry still has a way to go; however we have seen from previous Bellwether Reports that Q3 is traditionally a time when many marketers revise their budgets down. Still, uncertainty both at home and abroad are key factors for the current business sentiment expressed in this report. The evolving situation with Iraq and the state of some euro-zone markets will play largely into the business decisions of many UK marketers both this quarter and next. Good news however, is that television has seen growth for a consecutive 5 months and BACC figures show that on last year we are up 24% in the number of television commercials created, which has certainly got to be a positive sign for the industry."
Said Chris Williamson of NTC Research and author of the report: “The Q3 Bellwether report shows that the worse is not necessarily over for the UK adverting industry. The downward revision to Q3 budgets contrasts with upward revisions during the first half of the year. However, some comfort can be taken from the fact that Q3 appears to be a popular time to adjust budgets and the latest cuts were less steep than seen in the third quarters of previous two years.”
The Bellwether report contains detailed analysis of the UK’s marketing economy, based on a survey of 250 companies, representing all key business sectors.
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).
Note to editors:
The Bellwether Report is produced for the Institute of Practitioners in Advertising (IPA) by NTC Research and published its first findings for Q1 2000. It is based on a questionnaire survey of 200 plus UK-based companies that have agreed to provide regular quarterly information on trends in their advertising and marketing activities. The survey panel, recruited from the UK's top 1000 corporations, was selected to ensure that the survey data provide an accurate indication of actual spending trends in marketing communications in the economy as a whole.
The IPA is the industry body and professional institute for the UK advertising, media and marketing communications agencies. It has 221 corporate members represent the major part of the advertising agency business, handling advertising with an estimated value of some £7,000 million per year (over 80 per cent of advertising placed by agencies) on behalf of many tens of thousands of their client companies and organisations nationwide.
For further information:
Bruce Haines, Group Chairman of Leo Burnett and IPA President tel: 020 7591 9360
Chris Williamson, NTC Economic & Financial Research tel: 01392 202 361
Last updated 19/09/2008