Direct, digital up as gloom spreads

Brands owners are increasingly turning to direct and digital marketing to boost sales, according to the latest IPA/BDO Bellwether Report, which shows these two disciplines are the only rays of light in a very gloomy picture.
With overall confidence in the market at a 2-year low, total marketing spend was revised down for the third successive quarter in Q2 2011, although the pace of budget trimming was the lowest in this period.
Around 22% of Bellwether companies reported a decline in total spend from the situation three months ago, versus 20% that signalled an increase. The resulting net balance posted -2.2%, up from -5.1% in Q1 2011.
Anecdotal evidence provided by Bellwether respondents suggests that companies slashed marketing spend in order to shore up their profit margins.
Looking at the breakdown of total marketing spend, budgets were cut for main media advertising (-4.2%), “all other” (-7.1%) and sales promotion, with sales promotion seeing the sharpest downgrade to spend of all categories (-7.4%).
The decline in main media (-4.2%) in part reflected an easing in growth of Internet advertising spend with the survey registering the smallest upward revision to Internet ad budgets in the current two-year period of growth (+1.9%). Meanwhile, direct marketing budgets were revised higher (+2.5), as were those for search marketing (+4.6).
IPA Direct Marketing Group chairman and chief executive of Lida Mel Cruickshank said: “As only one of two categories to see marketing budgets revised up in the second quarter, it is clear that companies are turning to direct marketing to provide return on investment against marketing spend. And, although annual budgets are still revised down for the third year, it is at the slowest rate, which should give us comfort that we are moving into a more positive position than we have seen over this period of time.”

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1 Comment on "Direct, digital up as gloom spreads"

  1. Am I just old? Or is history just repeating itself? ‘Slash marketing spend to shore up profits.’ Shortsighted? Maintain a measurable multichannel approach – with direct response and ROI front of mind – didn’t that prove sensible once before? http://www.wandagency.com

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  1. ROI big winner in new Bellwether

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