Marketing group that contains PR shows biggest budget drop

The Q3 IPA Bellwether Report has revealed PR is in the sector seeing biggest budgetary difficulties amid a pessimistic outlook for marcoms more broadly.

Bellwether report: reveals that budgets in the category that includes PR have dropped more than any other marketing discipline
Bellwether report: reveals that budgets in the category that includes PR have dropped more than any other marketing discipline

The survey revealed that budgets in the ‘all other’ group, of which PR is a part, saw a downward revision of more than 16%, the biggest in three years.

This follows on from a drop of 8.9% in the previous quarter and a drop of 9.3% in Q1.

It is also the bleakest in a survey that revealed the downward revision of overall marketing budget was the biggest since the end of 2009.

Overall, 23% of companies reported a reduction compared with 18% reporting a rise, with a net balance of -5.5%.  

This figure was significant worse than the  -1.1% reported in Q2 and +1% in Q1.

And business confidence among marketing executives in relation to their own companies’ prospects has weakened compared with three months earlier, with a net balance dropping from 2% to -3%.

Meanwhile, marketing executives’ views on the prospects for the industry in which they operate saw the net balance of -16.5%, little changed from Q2’s -16.8%.

However, there was more positive news in other groups. Both internet advertising budgets and online search/SEO spend registered an improvement, with net balances at +7.1% and +5.2% respectively.  

Chris Williamson, chief economist at Markit and author of the Bellwether, said: ‘Disappointing sales and revenues prompted companies to cut their marketing budgets again in the third quarter, reflecting the weaker than expected economic environment than many had hoped to be operating in.

'The modest increase in budgets that had been set at the start of the year looks instead to turn into a reduction in spend compared with 2011, as companies seek to reduce costs.  It therefore seems likely that marketing spend will have fallen for a fifth successive year.'

He added: ‘The Bellwether is consistent with other surveys that suggest the official data overstated the weakness of the economy in the first half of the year, but also suggests that economic growth slowed, and perhaps even stalled, in the third quarter. With business confidence falling further in the third quarter, prospects also look rather subdued for the rest of the year.’

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