Marketing budgets suffer record cuts

Marketers are being warned that the UK advertising business will be “no place for the faint-hearted” in 2009, following the biggest cuts to their budgets since records began.

Issuing the alert, Moray MacLennan, president of the Institute of Practitioners’ Advertising, said the budgets of 300 marketers traced by the IPA show confidence has plummeted.

Disappointing sales in the last quarter of 2008, when concern over the economy was rife, was blamed for their budgets being trimmed by the biggest margin in nine years.

Just a reported 7 per cent of all companies were confident enough to increase their budgets, compared with 15 per cent this time last year, while almost half set them downwards.

Jim Marshall, chairman of the IPA Media Futures Group, said the negative revisions to annual marketing budgets reflected the “general economic gloomy prospects” that companies foresee.

Testifying that their outlook has indeed darkened, three-quarters of companies said the prospects facing their industries had deteriorated compared to three months ago.

As a result, budgets for advertising in main media were hit hardest, potentially reflecting a “very tough year” for them, as well as ‘all other’ activities, including PR, events sponsorship and market research.

Illustrating the scale of the cutbacks, the IPA survey also shows that even the once-resilient area of internet advertising suffered a record reduction in spend in the last quarter of 2008.

However, there was some reassurance: the pressures were tipped to provide opportunities for advertisers that hold their nerve and continue supporting their brands.

And given that marketing and creativity are not the problem, but the solution, the IPA said it would be interesting to see when investors look favourably on those who maintain budgets and increase share of voice, as “they are more likely to succeed in the future.”

 

13th January 2009

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