DM spend cut as online rises

IPA 4The latest IPA Bellwether Report has proved something of a curate’s egg for the digital and direct marketing sectors, with online ads witnessing another increase, seemingly at the expense of DM techniques.
The overall picture saw marketing budgets broadly unchanged in Q1, with 17% of firms increasing spend and a similar percentage cutting budgets, resulting in a net positive figure of 0.1%.
Online advertising saw the strongest growth with a net balance of 8.9% of companies planning to spend more – the fastest rise in 18 months. However, things are not quite so rosy for direct marketing; budgets showed a net balance of -3.6%.
Yet there was a glimmer of hope for next year; the survey found that 36% of firms were planning to increase 2013 budgets relative to last year, compared with 23% anticipating a fall.
Markit chief economist Chris Williamson, author of the report, said: “An upturn in business confidence and corresponding increase in budgeted marketing spend for 2013 augurs well for the wider economy. However, while the Bellwether is suggesting the economy is recovering, it looks set to be another challenging year for businesses and the pace of economic expansion is likely to be modest.
“The hope among many companies is that increased sales and marketing activity will drive business growth, but firms will need to see convincing signs that demand and profits are improving in the coming months to prevent business confidence falling again and marketing budgets from being revised down as the year proceeds.”
Jaywing chief executive Martin Boddy said: “The fluctuations in spend across the various disciplines reflect one key issue: that clients want more measureable campaigns. Those disciplines where ROI may be harder to justify, or ones that aren’t in vogue, are naturally going to struggle to justify significant portions of the financial pie.
“But consumers don’t care about channel; therefore neither should the brands, nor the agencies. In austere times, marketing ROI can be fuelled by ensuring consistency of messages and interactions at every touch point of a consumer’s brand journey; making brands feel human, customers feel special and relationships mutually beneficial.”

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