Today’s (14 July) quarterly survey of marketing budgets and confidence found that spend had been revised down in the second quarter for the third successive three month block.
Marketers’ confidence in their own companies and their industry’s business prospects were also in the red.
Budgets were set higher year on year at the start of 2011, explains Chris Williamson, chief economist at Markit and author of the Bellwether, and although that initial optimism was tempered in the first-half, budgets are still set to increase this year, the first annual increase in four years.
Budgets were set higher at the start of 2011, he adds, because of better economic news in the final quarter of 2010. A subsequent drop in disposable income, increase in commodity prices and the Japanese earthquake knocked confidence, he adds, leading to budgets being trimmed.
It is likely, however, that commodity prices could fall in the second half, driving inflation down and providing consumers with the confidence to spend more.
“There is caution in that some are revising budgets down but optimism as a whole is up in the hope that things will turn around in the second half”.
Williamson adds that the 2012 Olympic Games also offer marketers are a “glimmer of hope” that budgets will pick up next year.
“There are some worrying signs but all is not lost”, he adds.