Media suffer as advertising spend slides

AdvertisingMarketing: One in three of Britain's biggest advertisers has cut their budgets in the past three months, according to research published this week. Only one in five companies increased marketing budgets but even that glimmer of hope will not console beleaguered media owners as the increased budget was diverted into direct marketing, writes Bernice Harrison.

The report, published by the UK's Institute of Practitioners in Advertising, found only one in three companies planned a modest rise in media advertising spend.

The institute issues closely-watched quarterly Bellwether reports about the state of the industry and this is the most negative report yet.

But it maintains there is cause for optimism. "These figures continue to show some tactical changes to the media mix brought about by the economy and a possible reflection of end-of-year revisions." said president Mr Bruce Haines.

"The market place is cautious but optimistic. And there are some sectors, such as retail, that are holding up very well."

There is no similar research data available for Irish advertising.

There are similarities, however, between several of the report's findings and what is happening on the ground in Irish marketing departments and agencies.

The institute found that trends in both new budget setting and revisions to current budgets were mixed by sector. Retail and consumer-oriented sectors reported the strongest growth of budgeted spend for 2002 and the least downward revisions to current budgets. The worst performing sectors were financial services, travel/transport, and entertainment/ media sectors.

At least three Irish advertising agencies - Dimension, Ogilvy & Mather and Javelin - have reported that, while they have let people go, those departments dealing with direct marketing or CRM (customer relationship management) have been beefed up in recent months to reflect increased spending in these areas by clients.

Irish agencies reported that, in the last quarter, clients were sitting on their hands waiting for the start of 2002 before committing to budgets. In Britain, the report revealed the situation was the same but, according to Mr Chris Williamson of NTC Research and author of the report, there is reason to be optimistic.

"The easing in the rate at which media advertising budgets are being trimmed when compared with the third quarter provides promising evidence that we may at the bottom of the cycle."

Disappointingly, the Irish Institute of Advertising practitioners, the IAPI, provides no such overview of the industry here.

While virtually all advertising agencies in Ireland are members of the organisation, little data are collected from them (or made available by them) for public analysis, even though the health of advertising mirrors the state of the economy generally.

The latest advertising spend figures recorded on the IAPI website are for 2000 and the latest research publication on the website on media trends covers 1994-98.