UK plc 'upbeat' about marketing

Runaway profit-making for the City’s big businesses has convinced them to hand their marketers the healthiest budgets since 2000.

The vote of confidence in marketers, advertisers and PR professionals reflects a general recovery in the industry, after their budgets were trimmed in the past two years.

Such are the headline findings from yesterday’s Bellwether report, by the Institute of Practitioners in Advertising, which says direct and internet marketing remain the top mediums.

Yet the report, based on the spending plans of 250 firms, found that in the first quarter 2007, budget-setting for advertising in mainstream media rose for the first time in over two years.

The strongest growth in budget-setting overall was for direct and ‘alternative’ marketing activities, the report says, like event sponsorship, PR and SMS-based communication.

So far this year, about a quarter of companies have notched up their marketing spend, while just over half have set their yearly budgets higher than their actual spend in 2006.

In line with previous marketing forecasts, the budgets for e-promotions outperformed all other sectors in the first quarter, with about one in four firms citing more to spend on the Web.

The increase means the internet now accounts for almost 6% of all marketing spend in the UK, meaning the medium attracts around £2billion every 12 months.

Similar to recent analysis into how marketers spend, and have spent their money, the Bellwether report said buoyancy for e-marketing has poured over to bring gains elsewhere.

In fact, just as the internet was solely responsible for growing UK advertising in 2006, according to the IAB, the report said it had also “helped generate” the positive for main media ads.

However if marketers continue to take note of where consumers are spending their time, then budgets, and indeed actual spending, for the internet, will increase.

Sir Martin Sorrell, chief executive of WPP: “The IPA Bellwether report, once again, reflects what WPP is seeing in the UK - a recovery against, admittedly, weak comparables, with the spending increase being dominated by expansion in direct, internet and interactive media.

“The UK mirrors what is happening in Western Continental Europe. Direct internet and interactive spending, however, still lags consumer use of such media, with consumers spending reportedly 20% of their time online.”

Elsewhere in the report, it emerged that direct marketing budgets were revised up only slightly in the first quarter, yet the sector saw the strongest growth of all categories in 2006 (excluding the internet).

Chris Williamson, report author, explained: “Surging corporate profits and above-trend economic growth has led to a further strengthening of marketing spend, with companies investing in additional marketing to support business expansion plans and new product launches.

“The planned increase in spend for the 2007 accounting year represents the most upbeat start to a year that we've seen since 2000.”


18th April 2007

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