Marketer confidence still low, says Bellwether report

Total marketing budgets have been revised down for a second successive quarter following a brief burst of confidence last year, according to the latest Bellwether Report.

The Q1 survey shows that the rate of budget trimming in the face of economic uncertainty was similar to that of Q4 2010, with the net balance of revisions to total marketing spend rising slightly from -5.4% to -5.1%.

This contrasts with the 0.5% net balance in Q3 2010.

A quarter of those surveyed in the latest Bellwether survey recorded a downgrade to total marketing spend, compared to a fifth that signalled an increase. The decisions reflect the impact of the public spending cuts on the economy and the pressure of rising commodity costs.

Budgets for 2011 have been set higher than actual spend in 2010 on average, with 39% of respondents planning to increase spend against 22% that predict a decline. However, the growth is still very small compared to pre-2008 figures. Actual spend in 2010 fell for a third successive year.

Companies’ confidence for their particular sectors has hit a two year low, with confidence dipping to the lowest point since Q1 2009. However, respondents grew slightly more optimistic regarding their own companies’ financial prospects.

Head of media for BDO LLP Andy Viner says: “The reduction of marketing budgets for the second successive quarter supports our anecdotal evidence that companies are taking a cautious approach to marketing expenditure against a backdrop of continuing economic uncertainty, subdued business confidence, cash flow pressures and mixed financial indicators in recent weeks.”

He adds that the outlook for 2011 is “a lot more positive with more businesses planning to raise their marketing spend compared with 2010.”

Looking at individual media, direct marketing budgets were revised down for the first time in six quarters while main media, encompassing internet advertising, was revised upwards.

The data is based on a survey of nearly 300 UK based companies representing a broad variety of advertisers.

To see the data, see ’related images’ on the right-hand side of this article

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