IPA survey predicts more uncertainty

The hoped-for recovery in the fortunes of Britain's ad industry is under threat because clients are downsizing their marketing spends, according to new research.

Falling sales, deteriorating profits, uncertainties about the economic outlook and fears about war with Iraq have resulted in substantial downward revisions in budgets, an IPA-commissioned survey says.

The verdict of the Bellwether Report, which monitors the advertising and marketing activities of more than 200 UK companies, suggests that clients remain unwilling to commit spend while the economy remains unpredictable and political turmoil is a possibility.

Chris Williamson, a senior executive of NTC Research and the author of the report, said the fact so many ad budgets had been revised downwards for the third quarter of this year showed that "the worst isn't necessarily over for the UK ad industry".

Bruce Haines, the IPA president, acknowledged that the figures "suggest that the industry still has a way to go".

The survey found clients' hesitancy reflected in the fact that total marketing budgets were revised down on average for the first time since the final quarter of last year.

Only 15 per cent of companies said they had revised budgets upwards for the third quarter of the year, while 23 per cent reported downward revisions.

Only direct marketing and internet-related marketing activity saw rises in spend for the period. But the increases were modest, particularly for direct marketing, where they were the lowest for a year.

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