Ad expenditure set to rise, IPA report claims

Britain's major advertisers have belied fears of a recession by

continuing to grow their marketing spends, according to new


Twice as many companies raised their spends than cut them in the first

quarter of the year, the Bellwether survey produced for the IPA


But the rate of increase is slowing, suggesting that the advertising

market in the UK is readjusting, having been distorted by the dotcom

frenzy of the past two years.

However, IPA executives believe the results add weight to the belief

that a recovery in the second half of the year might take place.

The survey, based on almost 300 UK companies, shows that just over 40

per cent of them reported that they had raised their 2001 budgets

compared with the previous year, twice the number that reported a


But the extent of the rise is significantly lower than it was a year

ago, when more than 60 per cent of the companies surveyed reported

budget increases.

Many agencies have been fearful that a dramatic recent downturn in

new-business activity might be a precursor of recession as problems with

the US economy began to have an impact.

But Hamish Pringle, the IPA's director of marketing strategy, claimed

that the latest figures reflected adjustments taking place in their


'This year things are coming back into line and we may be seeing the

start of Europe decoupling from the US and Japan in terms of economic

forecasting,' he said.

Free-spending dotcoms, the US presidential election and the Olympic

Games are being cited as the reason for last year's exceptional

marketing expenditure.

This is born out by figures showing that TV revenue for February 2001

was pounds 143 million compared with pounds 152 million in 2000 and

pounds 141 million for 1999.

Bruce Haines, the IPA's newly elected president, admitted surprise that

twice as many clients were increasing their adspends despite a general

downturn in growth.

'Everyone expected these figures to prove the UK was set for a downturn

yet the picture is much more one of 'steady as she goes',' he said.

He added: 'The good news is that since the recession ten years ago, UK

businesses have learned the value of their advertising and marketing

communications expenditure and have realised that today's circumstances

offer the cheapest time to win brandshare.'

However, the survey suggests cost-conscious clients are looking for more

measurably effective advertising with direct marketing predicted to grow

faster than any other form of promotion.

But the survey confirms that the internet remains an immature medium for

many clients, with its share of spend forecast to remain unchanged at

1.8 per cent of total marketing spend this year.


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