Advertisers expect downturn to be brief

The report reveals that the number of companies cutting marketing budgets next year is outweighed by those increasing budgets by two to one.

The third-quarter 2001 Bellwether Report, which tracks advertiser spending intentions, reveals that 42% of those companies which set new budgets for 2002 in the third quarter have set them higher.

The overall net improvement signalled by the survey was only slightly lower than that recorded at the beginning of the year, which comes as an encouraging sign given that the data was collected in the immediate aftermath of the terrorist attacks on the US.

The report confirms the entertainment and media sectors among the worst hit, with budget cuts being most common. Also hard hit were financial services, transport and travel. In contrast, retail and FMCG and consumer durable are seeing budgets rise.

The report highlighted the continuing shift towards direct marketing and sales promotions as the sharpest decline in current budgets and the weakest growth in new budgets was reported for media adspend.

Bruce Haines, president of the IPA, said, "Behind these figures lies a complex picture -- a fundamental change in media mix, a certain amount of caution, a reflection of the year's activities and perhaps also a reaction to the events of September 11. They show a significant redistribution of marketing spend, as well as those tactical decisions taken by cautious companies in the third quarter of the year."

Spend on internet-related marketing activities, which in some companies includes all e-commerce projects, was reported to have been revised down by the smallest extent in the survey history from an estimated 2.9% to 2.7% between the second and third quarter.

The overall net rise in spend for all other marketing activities was the weakest since data were first collected.

The Bellwether Report is available by annual subscription at £249 for hard copy, or at £399 for electronic advance release plus hard copy and full historical data series. IPA members are entitled to a 25% discount on these prices if ordered via the IPA website.

This article was first published on brandrepublic.com