Original article published here
Business confidence among UK marketing executives has plummeted to levels not seen since the recession more than two years ago, as fears over the outlook for the economy have worsened, according to the latest Bellwether survey.
The influential report, jointly produced by the Institute of Practitioners in Advertising, found that more than double the number of marketing executives have adopted a negative outlook on the prospects for the ad industry in the third quarter compared with the previous three months.
Almost 40% of respondents said they believe the situation is likely to worsen. Just 16% were positive on the financial outlook for the ad and marketing industry.
It represents a level of gloom not seen since the first quarter of 2009 when the UK was struggling to surface from the recession.
Despite the negative outlook, UK marketing executives did raise their budgets in the three months to the end of September, ending three consecutive quarters of budget cutting.
The report ascribes the change in strategy by UK marketers as a move to "promote new products and maintain market share amid strong competitive pressures".
However, a closer examination of the responses takes some of the gloss off the good news of budget increases. While overall there were more marketers raising their budgets than dropping them, the margin between the responses was slim.
Just 21% of companies said they were increasing budgets, against 17% that said they were cutting spend. Nevertheless, it is the biggest gap between positive and negative responses for 18 months.
Nicola Mendelsohn, president of the IPA, said the budget rises show that many companies "understand that those that maintain the strongest marketing spend will come out on top".
"That we are seeing a further decline in confidence overall continues to reflect the uncertain financial climate that businesses are operating in. This rise in spend demonstrates that many companies are trying to buck the downward trend," she said.
In terms of the different types of media, it is the first time since the second quarter of 2007 that marketers have increased spend across all categories. However, in some cases the increase recorded is by the slimmest of margins.
For example, just 0.5% more UK marketers said they would be increasing their spend on traditional media – such as television and press advertising – than cutting it.
To view the original article at the guardian, please visit http://www.guardian.co.uk/media/2011/oct/13/advertising-industry-bellwether-survey.