The Q4 2002 Bellwether Report, the quarterly survey of marketing budgets, published today (21st January 2003) by NTC Research on behalf of the IPA, shows marketing budgets were revised down in Q4 2002 for the second consecutive quarter. However the extent of the downward revision was less than seen in the same period a year ago.
The survey also forecasts stronger growth for the 2003 calendar year with twice as many companies reporting an increase in budgeted spend than reporting a decrease.
The quarterly report, which looks at advertisers’ new budget setting, current budget revisions and actual marketing spend, reveals that:
Total current marketing budgets were revised down on average in Q4 2002 for the second consecutive quarter, however, this revision was less steep than the one reported in Q3 and also less steep than the decline record in the same period one year ago.
Of those setting new budgets for 2003 in Q4, twice as many companies set budgets higher than reported a decrease. This improvement in total marketing spend signalled was the strongest since Q4 2000.
The Q4 2002 report which also features a break down of marketing spend in 2002 shows direct marketing and sales promotion were the only two disciplines to increase their share in Q4. DM is up from 26% to 27% and sales promotion 15% to 16%. Media adspend which still accounts for the largest share, 33%, fell from 35% in 2001 and ‘all other’ marketing activities (which includes PR, sponsorship and other similar activities) lost share from 24% to 23%.
Current media advertising budgets were revised down on average in Q4 2002 with 1 in 4 advertisers revising their budgets down and just 1 in 10 reporting upward revisions. Just 1 in 3 companies increased their media adspend budgets for 2003 compared with actual spend in 2002. Companies reported a drop in media advertising spend on average in 2001 compared to spend in 2000.
Just 14% of companies reported upward revisions to current sales promotion budgets while 15% reported downwards revisions. Sales promotion budgets for 2003 were set higher than spend in 2002 by slightly more companies than reported a reduction.
Current direct marketing budgets were revised up on average for the fifth quarter running in Q4, with the increase markedly higher than that signalled in Q3. Budgeted DM spend for 2003 is to increase on 2002 spend with three times as many companies reporting an increase as reporting a cut.
‘All other’ marketing activities (which includes disciplines such as: conferences, sponsorship, PR, corporate hospitality, entertainment and e-commerce)
Current budgets for ‘all other’ marketing activities which includes disciplines such as: conferences, sponsorship, PR, corporate hospitality, entertainment and e-commerce, were revised down on average for the second successive quarter during Q4 2002. The survey shows net increases in budgets for 2003 compared with actual spend in 2002 with just over 1 in 3 firms reporting an increase in spend while just over 1 in 5 reported a decrease. The resulting net increase was the largest recorded since Q4 2000.
The proportion of all companies allocating no marketing spend to internet-related activities fell from the six-quarter survey high of 29% in Q3 to 27% in Q4. The proportion of companies allocating less than 1% to internet related marketing also fell, down from 69% in Q3 to 62%. Meanwhile the proportion of all companies surveyed that allocated over 5% of their total budget to internet activities rose from 10% in Q3 to 15%.The overall implication of a shift in spend towards internet marketing activities was supported by an upward revision to current internet budgets.
Says Bruce Haines, Group CEO Leo Burnett and IPA President: “Continued economic uncertainty both at home and abroad together with disappointing consumer spending in Q4 has led many to cut their marketing budgets in an effort to reduce costs. This being said, new budget setting for 2003 signals some positive growth with over half of those surveyed increasing their marketing budgets in 2003 on 2003 in real terms.”
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).
The Q1 2003 IPA Bellwether Report will be published on 15th April 2003
Note to editors:
The IPA is the industry body and professional institute for UK advertising, media and marketing communications agencies and was established in 1917 as a servicing body and to negotiate on behalf of its members with media bodies, government departments and unions. The IPA’s 230 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 CEO Leo Burnett, IPA President tel: 020 7591 9360
Chris Williamson, NTC-Research and author of the report tel: 01392 202361
IPA Press Office tel: 020 7201 8240
Last updated 19/09/2008