Blog Post

Bellwether: Q4 UK Ad Spend Up Slightly On Online Growth

In a climate where economic forecasts continue to remain cloudy, ad spend in the UK went up marginally in Q4 2011, with increased spend on internet advertising making up for declined spend in traditional media and other outlets, according to the latest figures from the IPA Bellwether Report.

The survey of 300 UK media and marketing executives found that internet advertising budgets — covering areas like display and rich-media ads — were revised up by 13.4 percent during the quarter; the lower-costing medium of internet search, meanwhile, went up even higher: budgets for this were revised up by 14.9 percent. Traditional media, on the other hand, was down by 1.2 percent:

“There are signs that companies have become increasingly reluctant to invest in traditional media campaigns, instead diverting money towards the internet,” said Chris Williamson, chief economist at Markit and author of the Bellwether, said in the report.

This is also a reflection of the general trend that we saw for more consumers to turn to the internet — online and on their mobile devices — to look for the best deals around the holiday season.

But even while this sounds good news for interactive players, it looks like the situation remains unstable:

Overall, 20 percent of media execs said they were revising up their spend, while 19 percent said they were revising down. That means overall spend grew, but only by one percent. Still, that was enough to make this the second consecutive quarter of growth, as measured by the Bellwether folks.

IPA Bellwether analysis further found that respondents said that much of their increased spend was about protecting market share — and not because of an increase in consumer confidence.

In general, respondents reported a decline in business prospects, with some of the lowest figures seen since Q1 2009. One bright spot, however, may come in the form of summer sports — or so advertisers hope. Nicola Mendelsohn, IPA president, believes that “increased buoyancy” around the London 2012 Olympics and the European football championships will lead to more ad investment in 2012.