RESEARCH: Marketing spend rate of decline eases sharply as optimism grows

Marketing spend may have fallen for the eighth quarter running but business confidence is returning with nearly half of companies seeing improved prospects according to the latest IPA/BDO Bellwether survey.

Internet advertising was the only category to increase its advertising spend with budgets rising for the first time since Q2 2008. PR, events and sponsorship once again saw the steepest cuts.

Although overall marketing spend continues to drop it is with the smallest reduction in budgets for over a year.

The retail and travel and entertainment sectors saw upward revisions to spend, with the steepest falls seen in financial services, other non-governmental services, IT and computing, and industrial sectors.

BDO LLP head of marketing services Jim Houghton commented, "After two years of dramatic decline, the industry also needs to reflect on what recovery will mean when it does finally arrive.

The recession will no doubt have a long-term impact on marketing agencies but with intense competition and continued constrained budgets, companies will have to drive both brand and sales."