Online ad spend rises again in UK, says IPA

Mon Jan 18 2010, 18:04 PM

UK online ad budgets rose for the second quarter in a row in Q4 2009, although overall marketing spend fell for the ninth consecutive quarter, according to the latest report by the Institute of Practitioners in Adverting (IPA).

The Bellwether report, sponsored by accountancy network BDO, said that though overall ad spend continued to fall, the rate of budget-cutting was the slowest since Q1 2008. This came with increased optimism about economic conditions, with 35% of firms surveyed citing improved prospects - the most optimistic outlook in almost five years, claims the study. Ad budgets for 2010 have also been set higher, on average, than in 2009.

In Q4, internet ad budgets were revised up by 10.4%, while online search budgets were up 11.5%. Elsewhere, direct marketing budgets were revised upwards by 2.2%, the first increase since Q2 2007. Although media and sales promotion marketing spend was revised down, this was at a slower rate than in Q3 2009.

"These findings are welcome, in that they show that the picture painted by the last Bellwether Report was not a false dawn," says IPA President and Ogilvy Group vice chairman, Rory Sutherland. "This latest report also seems to bring particularly good news for direct and digital marketing activities, which seem to be leading the recovery."

BDO's head of media, Andy Viner adds: “After nine consecutive quarters of reduced marketing spend, it appears that the rate of decline is at its slowest in nearly two years ... Marketing budgets in 2010 are now set to grow, with companies re-thinking their budget allocation"

The IPA/BDO Bellwether survey uses data drawn from a panel of about 300 UK marketing professionals. It claims to provide a key indicator of the health of the UK economy.