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Q3 2004 Bellwether Report indicates longest period of continual growth since 2000

The Q3 2004 Bellwether Report, the quarterly survey of marketing budgets, published today (19th October 2004) by NTC Research on behalf of the IPA, reports further improvements to marketing spend with total marketing budgets being revised up for the fourth consecutive quarter and the first positive figures seen in the third quarter in the history of the survey.


The Q3 2004 Bellwether Report , the quarterly survey of marketing budgets, published today (19th October 2004) by NTC Research on behalf of the IPA, reports further improvements to marketing spend with total marketing budgets being revised up for the fourth consecutive quarter and the first positive figures seen in the third quarter in the history of the survey.

All categories of marketing spend saw growth, with the exception of ‘all other’ marketing spend, which includes activities such as PR, market research, sponsorship and conferences. This reduced spend reflects the need to cut costs in some companies, but also the diversion of spend to other marketing activities.

The Bellwether also indicated continuing growth for internet related marketing activities and the growth seen in Q3 was even greater than the growth indicated by the previous quarter’s report. In addition, direct marketing and sales promotion also saw upward revisions.

Although more modest than the Q2 report, media also saw an upward revision to adspend for the third quarter running. This upward trend contrasts with the downward revisions seen between mid-2000 and late-2003 and points to further potential growth in the future.
Looking at the various marketing activities covered by the Bellwether :

Although only modest, the upward revision to media adspend was noteworthy as the third consecutive quarterly increase. These upward revisions have been applied to media budgets that were on average initially set higher than actual spend in 2003 (new adspend budget setting at the start of 2004 had been the most buoyant since 2000). In contrast to previous years, increases to media adspend budgets at the start of 2004 have not been steadily revised down as the year has progressed. Instead, rising profits and robust business sentiment has encouraged advertisers to further boost their expenditure in each of the first three quarters of 2004.

Sales promotion
Sales promotion budgets were on average revised up in Q3, and contributed to a reversal of the downward trend seen in Q2. This upward growth can be seen to be as a result of new product launches and intense competition in the market which required companies to offer incentives to consumers.

Direct marketing
Direct marketing budgets were revised up for the fifth successive quarter and rose by a larger margin than in Q2. The increase indicated by the report suggests a move of spend away from main media towards direct marketing, albeit only modest.

Other marketing expenditure
Current budgets for ‘all other’ marketing were revised down on average in Q3 and dropped to a similar extent as in Q2. In real terms the decrease indicated by the survey was only modest with 20% of companies reporting an increase compared to 22% reporting a decline.

Internet marketing expenditure
One in four companies reported an upward revision to internet marketing budgets and 6% reported a decline, this indicates a rate of growth well above those of all other marketing activities monitored by the Bellwether Report . This suggests that internet related marketing continues to gain share relative to other activities. Also of note in this quarter’s Bellwether is that although one in four companies do not use the internet for marketing, the number allocating over 10% of their marketing spend to the activity rose to a new survey high of 10% in Q3.

Said Bellwether’s author Chris Williamson of NTC Research: “The latest Bellwether survey suggests that marketing activity in the UK continues to expand at a robust pace on the back of increased corporate profitability. The outlook for main media advertising is particularly encouraging, as buoyant initial budgets for 2004 - which were set at the start of the year to show the strongest growth for four years - have been steadily revised up on average as the year has proceeded.”

Said IPA President and Chief Executive of WCRS Stephen Woodford: “This is an extremely encouraging report and the best we’ve ever seen in the third quarter, which is usually the time for end of year budget readjustments. It shows there is underlying good profitability, although we’re beginning to see higher interest rates.”

Sir Martin Sorrell, Chief Executive WPP Group Plc said: “The Q3 Bellwether Report , once again, confirms our experience. The UK is showing a marked recovery, recouping the levels achieved in 2000. Investment in media advertising is expanding, with areas such as direct, interactive and internet expanding even faster as clients seek more effective cpms and more quantifiable communications services.”

Jim Marshall, Chairman IPA Media Futures Group and Chairman, Starcom UK Group said:
“This report is consistent with the continued increase in confidence in the economic outlook and the important role that advertising can play in supporting and developing the longer term success of our clients' brands. However it continues to be a tough and competitive market and the media owners should recognise that our clients and we need media that is both efficient and effective.”

Said John Owen, IPA Digital Marketing Group Chairman and Planning Director of Dare Digital: “The growth of online marketing shows no signs of abating. If anything the pace of that growth is getting faster as clients see the results for themselves. It's particularly interesting that a record number of advertisers are now allocating 10% or more of their total budget to the internet.”

Said Matt Atkinson, Chairman of the IPA Direct Marketing Group and CEO of EHS Brann: “The latest revisions to direct marketing spend in the Q3 2004 report are very encouraging, they represent a continued and well established trend in the growth and development of direct marketing. When you consider this represents a total increase in excess of 25% on spending in digital marketing, sales promotion and interactive marketing , it’s clear that more and more clients are looking for more integrated use of these skills, and this supports the continued trend towards greater use of responsive accountable marketing activity.” 

Said Bruce Haines, Group CEO, Leo Burnett: “I am happy to confirm that the latest Bellwether Report mirrors our experience.  I can only hope that the incredible accuracy of the Bellwether Report as a predictor proves as correct in these optimistic times as it did in the rather bleaker days.

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).


Last updated 19/09/2008

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