Increasing outlay on internet advertising saw UK companies' marketing budgets rise slightly in the third quarter of 2006, according to the Institute for Practitioners in Advertising.
Although budgets have now declined for eight consecutive quarters, the IPA's latest Bellwether Report found the rate of decline had slowed for the third time in a row.
Online advertising continued to outperform other sectors with strong gains. Some 11.5% of companies are now diverting more than 15% of their budget to internet marketing alone, more than double that seen since the apex of the dot.com boom in 2000.
IPA president David Pattison said: "The growth is driven predominantly by direct marketing and internet advertising at the expense of the more established media sectors, continuing the trends that we have seen over the last 18 months."
Traditional content companies like ITV, GCap and Trinity Mirror have seen their income from advertising fall in recent months and many are rushing to acquire or develop online services that could captalise on the growth in web ads.
Reader comments (1)
2:50PM on 14th July 2008
As the Bellwether report reveals we are indeed seeing a revision in spend on direct marketing. However, we predict that online will remain relatively immune as the results are so clearly quantifiable. For example with Google, if you're spending £1,000 a month for £5,000 return on investment, why would you cut that solid revenue stream?
Direct marketing is great, but campaigns can take a long time to put together and deploy, anything from eight to twelve weeks for example. Online / digital campaigns offer far more flexibility as online marketing is far more agile and can be adjusted, ramped up, even paused instantly. Moreover, digital campaigns can quickly be tweaked and optimised for a greater, more directly measurable effect.
One way to shore up ROI during a difficult economic period is to put the brakes on brand-building and perhaps rely on brand inertia. For example, if you're Barclaycard, people aren't going to forget that you're Barclaycard during a downturn. Instead invest money into performance media such as pay per click, affiliate, email, etc. And if you're worried about any erosion of your brand recognition you can track this using tools such as Google Trends.
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