Online lifts the gloom as DM dips

Industry joy as spend goes up againThey say all good things come to an end, and so it is with the latest IPA Bellwether Report which shows that direct marketing spend has been hit by its first downwards revision for two years, ending a seven-quarter sequence of expansion.
Luckily for DM agencies, digital now accounts for the lion’s share of their billings so they will be comforted by the fact that Internet spend was the best performing category, being revised up by 7.8%.
The report’s authors are at a bit of a loss to explain the slump in direct spend (down 2.7%), especially since they predicted in Q1 that budgets would increase sharply during the 2015/16 accounting period, suggesting it could be a “bumper year”.
The latest results provided by marketing executives now point to a rather subdued first half of 2015/16. Not that everyone should rush to Beachy Head just yet; in August it was revealed that the UK direct marketing industry is growing nearly three times faster than the UK economy, and increased in value from £16.5bn to £17.5bn in the past year alone.
And DM was not alone in recording a drop, PR, market research and sales promotion also declined, while advertising (described as main media in the report) and events were hardly flying (up 0.5% and 2.8% respectively).
Even so, the Bellwether Report back in Q4 2014 did predict a slowdown in some UK economic sectors and an easing in confidence surrounding the wider global outlook.
Perhaps unsurprisingly, considering it is his job to drum up support for the industry, IPA director general Paul Bainsfair remained upbeat. He said: “The important point is [some sectors] are still positive. More specifically, there are upwards revisions to Internet, events and main media advertising budgets in Q3. We are seeing marketers demanding greater accountability, physical presence and share of mind in their planned marketing spend.”
Meanwhile, Markit senior economist Paul Smith, who is author of the report, was slightly more circumspect. He said: “Casting the latest data against a record run of expansion in marketing budgets, a period that includes the strongest upward revisions on record, the correction in growth seemed likely.
“Focus is therefore probably better placed on the continued expansion in budgets and the welcome news that marketing executives are continuing to adopt a prudent, targeted approach to marketing strategies.”

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