Online leads way as overall spend rises

The pace of growth of online marketing spend in the UK is slowing, according to the latest IPA Bellwether Report.

Online continues to outpace the rest of the industry and now accounts for about 6% of total marketing budgets. However, in 2007, 19% of companies reported increases in their online spend in the first quarter

compared with 26% in 2006. The web is projected to account for more than £2bn of promotional spend this year.

Overall, marketing spend has risen at its fastest rate over the first quarter for more than three years. One in four companies reported an increase in their marketing budget, with the report suggesting a direct correlation with growth in corporate profit. In comparison, 16% of firms reported decreases, slightly up on the 15.8% in 2006.

The report predicts further spend increases this year, with money shifting from traditional media, although direct marketing saw a marginal increase in investment and now accounts for 27% of total promotional spend.

The service and consumer sectors, such as retail and FMCG, reported the most significant increases to marketing budgets, while industrial, utility and media sectors all reported budget cuts.

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