Marketing budgets 'finished 2009 at two-year low point'

Marketing budgets hit their lowest levels in two years at the end of 2009, according to the latest Bellwether survey. The survey, which is considered a key measure of the health of the ad industry, found that the amount of money spent on ad campaigns in the three months to the end of December fell for the ninth consecutive quarter. Some 25% of companies reduced marketing spend in the fourth quarter, it says, while just 18% recorded an increase. This was the lowest level of budget-trimming in almost two years. Marketing spend on the main media, such as TV, press and radio advertising, suffered most in marketers' budgets, with 22% of UK companies saying they cut back on spend on traditional media channels in the fourth quarter. Just 15% reported increased use. The Institute of Practitioners in Advertising (IPA), which produces the quarterly survey, took heart from the fact that more UK companies were upbeat about the financial outlook in their particular industries than at any time in the past five years. More than one third of those surveyed said that they were optimistic about a continued recovery, but 22% still said they were less upbeat about the future. Two-thirds of the Bellwether survey participants said that budgets for 2010 were higher at this stage than those in 2009. Internet advertising continued to lead the recovery, with digital budgets revised up for the second quarter in a row. About 20% of companies reported a budget increase. "The survey results are good news for the marketing services sector: after nine consecutive quarters of reduced marketing spend it appears that the rate of decline is at its slowest in nearly two years," said the head of media at accountancy firm BDO, Andy Viner. "There are a number of indicators to demonstrate that confidence is returning, with companies being upbeat about their own sectors and their corporate performance. Marketing budgets in 2010 are now set to grow". Rory Sutherland, the president of the IPA, said last week that the number of employees in UK advertising shrunk by 7% in 2009. • To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. • If you are writing a comment for publication, please mark clearly "for publication".