The performance of DM is a Bellwether for these straitened times

Russell Parsons

Amid the predictable doom and gloom reported about the quarterly Bellwether of the mood of the marketing nation, there was reason for optimism, particularly if you are a direct marketer.

Marketers glancing at the IPA-backed barometer of 300 top marketers last week could have been forgiven for thinking that all was lost. Almost a quarter of marketers cutting their budgets, low confidence in their own sectors and their own companies’ prospects, and concern over the state of UK PLC does not make for light reading.

Even the press release announcing the report did not try and put a positive spin on it “Confidence drop signals subdued outlook”. Bummer.

The reason for the portent is clear. Consumer confidence, the fuel for marketers, remains low and economic growth remains sluggish. Marketers, buoyed by January de vivre, and a better than expected 2010, set 2011 budgets high. As the economic reality set it, however, marketing budgets have been trimmed as finance officers look to protect profit margins. The opulence of marketers, they might have concluded, cannot be bank rolled in these uncertain times.

Anyway, I promised you better news. Although the majority of marketers cut their budget in the second quarter, the net balance of those trimming (-2.1%) is less concerning than quarter one’s -5.1%. Entrenchment continues, it seems, but no quite as fervently as at the beginning of the year.

It is noteworthy too that although spend will not perhaps finish the year as high as they had been set at the start, it is still on course to rise, the first annual increase in four years. Shards of hope in the shape of the 2012 Olympic Games offer marketers plenty of opportunity for next year too.

Bellwether also indicated that although less money is being spent on marketing, it doesn’t necessarily mean that the volume of marketing activity is lesser.

Direct marketing (up 2.5%) was one of only three channels to see more money spent on it in the second quarter. Direct response channels (search, up 4.6%), and online (up 1.9%) also gained.

Financial chiefs are unlikely to loosen the purse strings while consumer confidence remains so brittle. There is an opportunity for direct marketers, who oversee a channel that can demonstrate tangible return on investment against marketing spend, to shine.

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