UK businesses are cutting their marketing and advertising budgets for the third quarter in a row according to the latest Bellwether report, the quarterly survey of marketing budgets. The report also forecasts further cuts later in the year, citing disappointing sales, rising costs and growing economic gloom.
All sectors of marketing saw budget cuts with the exception of the internet. However, even this saw the smallest upward revision since 2003, with 19% of companies reporting a rise from the budgets set at the start of the year. A dramatic slowdown since the first quarter of 2008, when 27% of respondents reported an increase in their online marketing budgets since the start of the year.
Chris Williamson, Bellwether report author and chief economist at financial analyst firm Markit, said, “Rising costs and weaker-than-expected sales put pressure on companies to cut marketing budgets in the second quarter to protect profit margins.” Adding “This raises the possibility that marketing spend could fall this year for the first time since the survey began in 2000.”
However, Anthony Wreford, the deputy chairman for US marketing services company Omnicom Europe, said he expected internet marketing to rise, adding “Internet spending will continue to grow as more clients see the importance of this form of communication.”