Marketing Spend Down, Internet Up!Posted by Amanda Chapel Less for You, More for Me
The report also shows a continuing change in the breakdown of marketing expenditure; away from main media and sales promotion and into direct marketing and the internet. Direct marketing was the only Bellwether category for which the actual outcome of spend exceeded initial budget setting in 2005. The highlights of the report include... - Budget setting for 2006-2007 is subdued compared to previous years, the weakest recorded since 2002. This is due to tough trading conditions and higher than forecasted costs. - Traditional media budgets were cut for the sixth quarter in a row. Adspend is set to rise on last year, but at a weaker rate than the past two years. - Sales promotions budgets were cut for the fifth consecutive quarter, and saw the steepest drop due to worse than anticipated trading conditions. - Direct Marketing saw a marginal cut in current budgets for the first time in three years, but is expected to outpace all other Bellwether categories during 2006-2007. - Internet advertising was the only media to have budgets increased in Q1, the strongest gain since Q1 2004. It is now 4% of total spend. - Marketing spend for 2005-2006 was well below the initial budget settings for the year, the weakest level since 2002. Said David Pattison, IPA President, Chief Executive, PHD: "The Bellwether report continues the trend of spend moving away from the traditional media areas towards the consumer engagement media of direct marketing and the internet. Whilst overall growth is predicted for 2006 this growth is at its lowest level since 2002. Consumer spending is slowing and this traditionally directly affects our industry. There is optimism that our industry will grow this year but it looks a limited in the current market conditions." Said Sir Martin Sorrell, Group Chief Executive, WPP: "The IPA Bellwether report confirms our experience. The UK remains one of the weakest geographical markets at the moment. But new media and new technologies are growing rapidly as clients experiment with different approaches and question the value of traditional media." Note to editors: The IPA is the industry body and professional institute for UK advertising, media and marketing communications agencies. It was established in 1917 as a servicing body and to negotiate on behalf of its members with media bodies, government departments and unions. Its 250 corporate members represent the major part of the advertising agency business, handling advertising with an estimated value of some £13,000 million per year (over 80 per cent of advertising placed by agencies) on behalf of their client companies and organisations nationwide. (note this figure is based on 2005 Advertising Statistics Yearbook figures and excludes classified and television production costs). The term bellwether originates from the middle English bellewether, and refers to the practice of using a castrated ram (or "wether") with a bell around his neck to lead a flock of sheep. # # # Bookmark This
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Interesting. "Internet advertising was the only media to have budgets increased in Q1, the strongest gain since Q1 2004. It is now 4% of total spend."
Funny anecdote. Bite Comm. (my employer) bought the keyword "Bite" from Google about a month ago. We figured, if we're ever in the position to consult to clients about Internet advertising, we might as well have done it ourselves. Anyways, eBay, which along with Amazon much be Google's biggest customers, had already bid on the word "Bite" and actually owned the top spot for the sponsored link already. Their ad: Bite Looking for Bite? Find exactly what you want today. www.eBay.com I'm not sure how you look for "Bite" on eBay, but believe me, I'm doing everything I can to bid on it and somehow make greater use of it in my personal life. :)
Bite's a good brand name. But it almost has too much potential:
Overbite - Dental Marketing Practice Bite Me! - Crisis Communications and Issues Management Little Bite - Startup Marketing Last Bite - Proprietary Measurement Methodology Tasty Bite - Consumer Food and Beverage Practice Etc., the mind swims. - Amanda
My company, Blackfriars Communications, publishes similar data for the US, and our results largely parallel those seen in the UK by IPA. 2006 budgets are off to their slowest start since 2003 (we don't have data prior to 2003), and online advertising is one of the few bright spots as traditional advertising is declining. But you'll be glad to know, Amanda, that PR is still doing well, accounting for about 11% of 2006 budgets here in the US. You can read more at www.blackfriarsinc.com/m06q1-release.html.
BTW, you've got to do something about those anti-spambot images. They don't display properly on Firefox or Safari on my Mac. Ciao Amanda! Add Comment
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The Q1 2006 Bellwether Report, the quarterly survey of marketing spend, published today (18th April 2006) for the IPA by NTC Economics, reveals a cautious outlook by advertisers, with total marketing budgets revised down for the fourth consecutive quarter.