Advertising spend is growing as its fastest rate for seven years as marketing budgets are increased for the second successive quarter, according to the latest Bellwether Report.
The quarterly report, published by the Institute of Practitioners in Advertising, shows that one-in-five companies have reported an upward revision of their media budgets. It says that “such acceleration” in the second quarter of the year suggests that marketing spend for 2007 may be higher than first budgeted at the start of the year.
Internet advertising has continued to see the strongest growth and now accounts for 6% of all marketing spend. The report shows one-in-five companies now allocating at least 10% of their total spend to the internet. However, there was also strong growth in direct marketing and traditional media.
The biggest increase in budgets has been reported from companies in the service industries such as IT, computing, travel and entertainment as well as retailers whereas the industrial and utilities sectors saw the decreases in spend.
Chris Williamson, from NTC Economics and the report’s author, says: “Marketing spend is clearly rising sharply, with growth in the second quarter boosted by a buoyant economy and strong profits growth, particularly in the service sector, where profitability is currently rising at record rates.”
But WPP Group chief executive Sir Martin Sorrell says that while the report shows some “encouraging” results but he adds: “The UK remains the laggard, with growth in China, India and Russia leading the way.”