Advertisers to reduce budgets for next year

The majority of advertisers do not believe that the UK is facing a

recession but a third are planning to reduce their advertising budget

next year.



Asked if a significant recession was likely in the next 12 months in the

UK, 23 per cent of respondents to the Media Audits 2001 Advertiser

Survey said "yes". But 29 per cent plan to reduce their advertising

budget over the next year.



Half of all clients are planning to review their media within the next

two years and 17 per cent within the next six months.



The report also shows that clients are unimpressed with technologies

such as TiVo and video-on-demand. Some 30 per cent said that TiVo is

"irrelevant" to their communications strategy. Although most advertisers

saw the internet as part of their strategy, just 9 per cent believed

that their online budget was being spent "very effectively".



Some 52 per cent of advertisers agreed that online spend will decrease

more quickly than in other media and 62 per cent of advertisers said

there was too little transparency or accountability in the online

medium.



The report also suggested that advertisers are unhappy about the

regulation of the TV market. More than two-thirds were in favour of the

commercialisation of the BBC and 40 per cent were unhappy with plans to

keep the BBC outside the control of the regulator Ofcom.



Most advertisers surveyed - 56 per cent - still pay their media agency

on a commission basis, with 35 per cent paying by fee and 8 per cent

using a combination of elements.



Interactive TV is used by a minority of advertisers, with 11 per cent

having experimented in this area. Most advertisers, 58 per cent, have

not been briefed by their media agency on interactive TV.



The report also suggests there is a trend towards centralisation of

European media accounts. Some 26 per cent of clients intend to

centralise European media accounts within the next five years, with 10

per cent over the next two years. However, 23 per cent said they would

never centralise media accounts.



Responses to the report, which involved replies from 50 major

advertisers across all sectors with a total advertising spend of £700 million, were made before events in the US on 11 September.



Martin Sambrook, the managing director of Media Audits, said: "Some of

the attitudinal responses to issues involving new technology are

interesting. Advertisers don't see the benefit of TiVo and interactive

TV. So many hopes have been placed on these technologies as a new

paradigm. Negative attitudes to mobile communications suggest that

technology is seen as not perfected."



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