Ad spend falls, says IPA

Advertising budgets received their steepest cutback in two years in the fourth quarter of 2007, following three quarters of strong growth. So says trade body the Institute of Practitioners in Advertising (IPA), whose latest quarterly Bellwether Report shows that the average revision, across 250 UK companies surveyed, was a 0.7 per cent downward marketing budget movement.

The news came as no surprise to industry insiders. ‘Quarter-four spendings are always adjusted according to final company profit forecasts,’ rationalised Maurice Lévy, CEO of global media giant Publicis. ‘The main trends are confirmed: less attraction of traditional media and more digital. It looks like, despite a gloomy fourth quarter, we can expect a better 2008, probably thanks to the European Football Championships and the Olympic Games.’

Other major media companies are also taking a sanguine view of 2008, with the travel, entertainment, automotive and consumer durables sectors all moving forward positively. Jim Marshall, chairman of Publicis-owned media agency Starcom, puts a positive spin on things, ‘Against an albeit low base, last year’s evidence suggests that the marketplace looks somewhat more optimistic than [the current caution] might indicate, and media owners, perhaps buoyed by an early Easter, are confident there will be growth.’

Although it is no longer a new theme, internet advertising – buoying prospects
at AIM businesses such as TMN, Burst Media, Interactive Prospect Targeting, Pixel Interactive and Media Square – continues to outperform all other forms of media,
with some 23 per cent of the surveyed companies having increased their internet advertising budgets.