Marketing spend set to fall
May 11 2001
Advertising agencies will need to target their clients very carefully over the next few months because growth in marketing expenditure is set to slow to its second lowest level in six years. This is the message being sent out by the Chartered Institute of Marketing (CIM), which has just completed its quarterly Marketing Trends Survey. The survey reveals that planned expenditure growth is set to fall from 4.1% to 2.9%. (in 1995 planned growth was only 2%).
According to Douglas McWilliams, the author of the report, "Firms are already battening down the hatches by trimming spending plans. The decline in the US stock market and the problems associated with foot and mouth are creating concerns that have been translated into business targets."
Happily, some areas of marketing will outperform the revised growth targets. The largest increase in expenditure is earmarked for internet and information systems, where spending increases of 6.2% and 4.4% are being planned. Lead Generation and Promotions are next highest on the shopping list, at 3.6% and 3.2% respectively, while Public Relations and Direct Mail follow with 2.3% and 2.2% respectively. Telephone Marketing, at 1.3% and Sponsorship, at 0.1%, are the only two lower than Advertising, which comes in with a forecast 1.9% increase in expenditure.
While marketing expenditure is being cut, 81% are nevertheless happy with the size of their marketing staff at the moment. This leaves advertising agencies and outside suppliers to make the difference.
Ad agencies looking to target those clients most inclined to spend on marketing resources outside their businesses should focus on firms with a turnover of £50-£100 million. They are the ones planning the largest increases in marketing expenditure at 5.1%. Firms with a turnover of between £1-10 million are looking at a spend increase of 4.3%, while the largest businesses out there, those with a turnover of over £100 million, are not expecting to increase their total sales resource this year at all.
All service sectors are looking to increase their expenditure, with retail, at a planned 6.5% increase, the highest. Plans for expenditure are mixed amongst the manufacturing sector. Regionally, Wales comes top at 7.3% with firms in the East Midlands second at 6.2%.
Those businesses interested in accessing this report as well as earlier surveys, should log on to www.marketingportal.cim.co.uk .
With thanks to Lloyds TSB Success4Business. For more news and information visit www.success4business.com .
(11/5/01)
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