PR spend revised downwards in Q1, according to latest Bellwether survey

PR is part of the only marketing sector to record a downward revision to spend in Q1, according to the latest IPA/BDO Bellwether survey.

Bellwether: Revisions to total marketing budgets
Bellwether: Revisions to total marketing budgets

The ‘all other' category, which includes PR and events, recorded a downward revision, while sales promotion and direct marketing budgets were unchanged.

All other marketing budgets were revised up in Q1 for the first time in ten quarters, with around 21 per cent of companies reporting a rise.

Chris Williamson, chief economist at Markit and author of the Bellwether, attributed the downward revision to the higher cost of PR services. 'Companies are taking advantage of cheaper media ad rates which are lower. Taking on a PR agency is a bigger decision and more of a commitment. There aren't as many savings on below-the-line activity so it is being held back.'

Companies also remain upbeat about financial prospects, expecting the ongoing economic recovery to gain momentum, and plan to raise their spending for 2010.

Approximately 42 per cent of marketing executives surveyed were more optimistic about the financial prospects for their company than they were three months previously, and 31 per cent more optimistic for their industry. 

Analysis of marketing budgets in Q1

Over a third of companies have set 2010 budgets higher than 2009 spend on average. This contrasts to last year with report data showing that spend fell for the second successive year in 2009 albeit at a slower rate than the record decline seen in 2008.
Andy Viner, head of media at accountancy firm BDO LLP, said: ‘These results are a clear sign that renewed business confidence is translating in to real budget increases and tangible economic recovery. However, this should not be seen as simply a return to the good old days for all marketing disciplines, as spend on the marketing mix is changing.

‘Businesses need to justify their increased budgets and maximise return on investment, so we have seen a rise in measurable internet marketing activities and moves away from areas such as below the line spend and sponsorship. This general shift in the marketing mix coupled with the rallying of media stocks in the first quarter of 2010 is an indication of renewed confidence in the marketing services sector and will provide opportunities for marketers who are prepared to embrace the new media landscape.'


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