(MarketingClick)–Twice as many British companies raised their marketing budgets as cut them in the first quarter despite a sharp drop in advertising revenues for media groups, according to a report released on Tuesday.
“It is perhaps surprising that twice as many clients are increasing their spend on advertising and marketing despite the general turndown in growth,” Bruce Haines, president of the IPA, said in a statement.
“Everyone expected these figures to prove the U.K. was set for a downturn yet the picture is much more one of ‘steady as she goes.'”
More than 40% of the U.K. companies surveyed said they had increased 2001 marketing budgets from last year, double the number reporting cuts, the Institute of Practitioners in Advertising said in its quarterly Bellwether Report.
Haines interpreted the survey’s results as a sign that a second-half recovery might be on the cards, as U.K. companies realized a downturn was the “cheapest time to win brand share.”
Such optimism dovetails with a report in the Financial Times on Tuesday which said the International Monetary Fund expected the U.K. to escape the worst of the global economic slowdown.
British TV companies have seen sharp falls in advertising income for the first part of year, compared with record levels in early 2000, although many of the advertisers shying away from spending on TV commercials are U.S.-based.
The IPA noted that while total ITV revenue for February 2001 of 143 million pounds was down on 152 million pounds one year before, it was up on 141 million in February 1999.
“What those figures show is the extraordinary impact of the dot-com frenzy, the U.S. Presidential election and the Olympics boom, which made last year so exceptional in terms of marketing expenditure,” IPA’s Hamish Pringle said.
Advertising spending tends to make up about a third of overall marketing outlay, according to the IPA.
The Bellwether Report, produced by NTC Research, takes a quarterly survey of marketing plans from 300 of the UK’s top 1,000 corporations.
Utilities, telecommunications and industrial companies make up 24% of the companies, travel and entertainment 15%, and financial companies 11%, the IPA said.
