#business development, third quarter 2010 IPA/BDO Bellwether report

Third quarter 2010 IPA/BDO Bellwether report

The IPA / BDO Bellwether report for the third quarter, 2010 has been released today.

Companies have grown less optimistic about the financial prospects for their industries, with positive sentiment dipping to the lowest in five quarters.  Bellwether data coupled with this low optimism suggests that the second quarter surge in GDP marked the peak of the recovery cycle.

However the stabilisation of marketing spend in Q3 marked an improvement, and marketing spend for 2010 as a whole may still rise.

By sector internet advertising recorded the fastest rate of budget growth by a wide margin, impacting on main media budgets which were revised up at the most marked rate in three years. Direct marketing spend was also revised up at the fastest rate in four years.  In contrast, ‘all other’ (below-the-line such as PR, events) and sales promotion budgets were revised down though rates of budget trimming have eased since Q2.

Says Rory Sutherland, IPA President, Vice-Chairman, Ogilvy Group UK:

“Though these latest figures suggest hesitancy they don’t indicate absolute pessimism. In these times of uncertainty around Government spending and the sustainability of an economic recovery it is not surprising that businesses remain cautious. And even though the upward revisions to marketing budgets are only slight, marketing budgets have stabilised nevertheless.”

Says Andy Viner, Head of Media, BDO LLP:

“The upwards revision to marketing budgets, albeit marginal, is a welcome sign of optimism and we expect to see marketing expenditure as a whole rise in 2010. Internet advertising continues to exhibit the fastest rate of growth, as firms recognise the importance of a greater on-line presence and look for increasing return on investment through technology-led marketing solutions, while maintaining a flexible business model.

“However, the overall outlook is one of caution with companies having to respond operationally to the changing commercial landscape. We are seeing them take a tentative approach to the commitment of non-essential expenditure against a continued backdrop of looming public sector cuts and general economic uncertainty.”

The report is available from the IPA (login required).


About
Rod Geoghegan works with Marketing Services Agencies, Tech Start-ups and Professional Services Firms to plan and deliver growth.

He is Founding Partner at Metropolis Partners


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