Marketing departments get budget boosts in 2012

The latest IPA Bellwether survey shows that 20 per cent of firms have reported an upward revision of marketing budgets, as companies seek to protect market share against competitors.

Budgets for 2012 look set to rise relative to 2011 actual spend, although the planned increase is weaker than any year prior to 2009.

By sector, “all other” (below the line) and main media spend were the only types to see a reduction, suggesting companies were keen to cut spending on traditional media in favour of online, price discounting and more direct marketing strategies.

“This rise in spend for a second successive quarter shows that many companies remain committed to invest in marketing at present,” says Nicola Mendelsohn, IPA president, and executive chairman of Karmarama. 

“A further decline in confidence is hardly surprising due to the overriding mood of uncertainty for the year ahead. Yet despite this it’s encouraging that firms are still planning to increase their budgets in 2012. “

This comes against a backdrop of falling business confidence. The survey shows that marketing executives’ confidence has fallen to an 11-quarter low: the net balance of -44.9 per cent was down from -23.3 per cent in Q3.

Additionally, marketeers reported that financial prospects for their own companies had deteriorated for the first time since Q1 2009.

Chris Williamson, chief economist at Markit and author of the Bellwether report adds: “Looking deeper into the data, there are signs that companies have become increasingly reluctant to invest in traditional media campaigns, instead diverting money towards the internet and direct marketing. 

“This reluctance reflects lower than expected sales and profits in recent months, as well as growing unease about the economic outlook.”

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