DM continues to wrest budget from other media

LONDON - Direct marketing has once again proved the bright spot in the marketing services industry, being one of only two disciplines to see an increase in budgets.

According to the latest Bellwether Report, published by the IPA and based on research carried out by NTC Research, direct marketing budgets were revised upwards for the third quarter running, with evidence that companies are shifting budget to this discipline because it is more efficient and costs less. The only other discipline to see an increase was internet advertising.

However, the increase was only slight and was smaller than that seen in the final quarter of last year.

Of the companies questioned, 36% who were setting new budgets this quarter said they were increasing spend on direct marketing, against 14% which said they were cutting spend.

Look back on 2002, the IPA found that 39% of companies reported an increase in real terms in direct marketing spend for 2002 -- more than twice as many as reported a decline. It showed the greatest increase in spend of all the main marketing categories in 2002.

Stephen Woodford, CEO of WCRS and president of the IPA, said: "The first quarter 2003 Bellwether Report is reflecting the current wait-and-see attitude of advertisers towards spending their marketing budgets.

"Certainly the war in Iraq, as well as a continued tough economic climate at the moment, is foremost on advertisers' minds, but there are definitely some encouraging indicators. The general picture appears to be that the rate of decline in current media spend budgets is slowing significantly. We're seeing media adspend budgets stabilising and increases in DM, sales promotion and internet marketing activities as well as 'all other' activities including PR."

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