Online boom masks volatile adspend

dm disciplinesOnline advertising continues to shore up the entire marketing industry, according to the latest IPA Bellwether Report, although spend in other disciplines – including direct marketing – remains highly volatile.
Overall marketing spend is at its highest level in the 13 years since the report has been published. The net increase of 12.3% in companies registering an increase in ad budgets has sparked claims that the UK economy is “on the rise again”.
However, the rise in online spend (+11.7%) and main media advertising (+3.4) masks a general malaise in marketing departments, with budgets for DM (-3.4%), market research (-3.0), PR (-1.7) and events (-1.1) all shrinking.
The reductions mirror that of the Q1 report, which were thought to have been reversed in Q2 when DM went up slightly, but it seems this confidence was short-lived. The report said: “There remains some evidence of companies taking a cost cautious and prudent approach to spend, with a number of respondents choosing to boost budgets in some areas, but offsetting to a degree with cuts elsewhere.”
Unbowed, IPA director general Paul Bainsfair is keen to big up the results. He claimed: “This latest Bellwether report will provide a welcome boost to our industry, building on last quarter’s results. It indicates that companies are beginning to move forward away from the recession and that the UK economy is on the rise again. This optimism will send a continued upbeat message to the advertising industry and the wider economy.”
Meanwhile, the report’s author and chief economist at Markit, Chris Williamson added: “Marketing spend looks set to rise sharply as companies boost their budgets to an extent not seen in the 13-year history of the survey.
“The increased appetite to spend on advertising and marketing is being fuelled by a surge in business optimism, with firms seeing their financial prospects to be the brightest for at least eight years.”
Earlier this week Nielsen reported that media spend in the UK had fallen by 5.5% year on year between April 1 2012 and June 30 2013. Across Europe, the year-on-year decline for the quarter was 6.6%, while Latin America grew by 13.1%, Asia-Pacific was up 6.4%, and there was double-digit growth in Indonesia, China and the Philippines.

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