DM budgets increased 2.5% in the three months to 30 June. Spend fell 1.8% in the first quarter (see chart below).
Mel Cruickshank, chairman of the IPA’s direct marketing group, says the reverse shows companies are “turning to direct marketing to provide return on investment against marketing spend”.
Spend on search increased by 4.6% in the quarter, while online ad spend rose 1.9%. Increases were 4.3% and 9.3% in the first quarter respectively.
Chris Whitelaw, chairman of the IPA’s search group, says that in the current economic climate, companies look to “immediate and efficient customer acquisition channels” to shore up profit.
“The strength of search marketing conversions rates continues to support marketers’ confidence in the channel despite the ambiguous macro-economic signals,” he adds.
Spend on sales promotion suffered the steepest decline, down 7%. Spend had dipped 6.8% in the first quarter.
Overall, marketing budgets were revised down 2.2% in the second quarter.