“Cautious” marketers put budgets in reverse, says Bellwether
The fragile nature of the recovery in the marketing industry has been highlighted by the latest Bellwether report, which found that marketing budgets were revised down in the second quarter.
The gloomier forecast from marketers comes amid fears that the recovery in the UK economy is also faltering.
Financial think-tank the National Institute for Economic and Social Research said last week that quarter on quarter growth slowed to 0.7% in the three months to June, from 0.9% at the start of the year.
Many observers fear that the UK economy could be hit again in the next year after VAT increases to 20% in January and the extent of public sector job losses becomes known.
Despite the more pessimistic picture that emerged from Bellwether in the second quarter, other recent evidence suggests that advertising spend will grow this year following falls in the wake of the 2008/09 global recession. The latest Advertising Association/Warc data predicted overall market growth of 3.3% in 2010.
Commenting on Bellwether, Rory Sutherland, IPA President and vice-chairman of Ogilvy Group UK, says the “cautious” approach shown by marketers in the second quarter is understandable given the “uncertain” nature of the economy.
“However, though this indicates a less optimistic picture than previously thought for this year, marketing spend is still set to increase,” he adds.
Direct marketing, internet and internet search were the only media channels forecast to increase, according to Bellwether, with the net balance of those predicting uplift 1.2%, 10.1% and 6.6% respectively.
Sales promotion is expected to experience the steepest drop, by -11.5%.
