Business marketing spending up for third successive quarter
Business marketing budgets were revised up for the first quarter of 2012, marking a third successive quarter of increased spending, a survey by the Institute of Practitioners in Advertising (IPA) has found.
According to the survey, which was conducted and published in collaboration with Markit Economics, the boost in business marketing budgets came from a response to new product launches, optimistic improvements in economic conditions and higher rates of return on investments.
Although upward revision was marginal - with a net balance of one per cent - this was up from 0.6 per cent from the last quarter of 2011, with 22 per cent of businesses reporting increased spending on marketing.
This first quarter increase contributed to the first rise in annual spending in four years with nearly a quarter of businesses surveyed saying that their net balance in spending had increased by 2.5 per cent compared with the year previous.
Business confidence amongst marketing executives also reached the highest level in two years, with net company balances up significantly from -12.4 per cent in the fourth quarter of 2012, to 19.1 per cent.
Internet advertising budgets were the main contributor to the overall upgrade in marketing spending, which saw a net increase of 7.8 per cent. Within internet advertising, online search and search engine optimisation (SEO) - the process of improving website visibility to search engines - spend was also revised up by 4.7 per cent. Sales promotion meanwhile remained unchanged.
Nicola Mendelsohn, IPA president and executive chairman, said: "It's encouraging to see that marketing budgets are up again for the third quarter running, leading to the first rise in annual spend in four years.
"Business confidence is returning which is also welcome news. Companies have also set their budgets higher for 2012, albeit with a much greater degree of caution than in recent years due to the continuing uncertain economic climate."
Both the IPA president and Chris Williamson, chief economist at Markit and author of the report, remained optimistic that key events such as the London 2012 Olympics and the Queen's Diamond Jubilee would ensure that marketing spend continues to rise.
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