Sector: Media

In an encouraging sign for the sector, the latest IPA/BDO Bellwether survey shows an increase in marketing budgets in the first quarter of 2010, the first rise in ten quarters, with around 21 per cent of companies quizzed reporting a budget increase.

Considered a key measure of the advertising industry’s health, the survey shows that companies are also upbeat about financial prospects, expect the ongoing economic recovery to gather momentum and plan to increase their spending in 2010.

Around 42 per cent of marketing executives surveyed said they were more optimistic about their companies’ financial prospects than they had been in the previous quarter, while 31 per cent were more optimistic for their industry. On average, over a third of companies have set 2010 budgets higher than 2009 spend.

Main media budgets were revised upwards for the first time since the third quarter of 2007, and while internet budgets were adjusted upwards for the third successive quarter, this latest upgrade was the sharpest since Q1 2008.

Sales promotion and direct marketing budgets were unchanged, while ‘all other’ – the category including below-the-line activities such as PR and events – was the only sector to record a downward spending revision.

Rory Sutherland, IPA president and vice-chairman of Ogilvy Group UK, said ‘It’s good to see that businesses are now increasing their investment in marketing as a route to growth – a welcome change in sentiment compared with this time last year. While online activities are leading the turnaround this year, the findings show that conventional advertising has now also turned the corner.’

In the quoted company space, communications group Creston cheered followers with a positive update covering the year to March 2010. The fully listed company, which is outperforming the sector, bettered the board’s expectations in terms of sales, headline EBITDA and debt reduction.