U.K advertising budgets plummet

The IPA report found that marketers in the U.K. will cut ad spend in 2009, with companies setting budgets below the previous year's level for the first time since the firm began reporting, nine years ago, and at the sharpest rate.

During Q4 08, 49% of companies reported a decrease in marketing spend, the fifth quarter in a row that marketers have pared down marketing budgets.

Nearly half (45%) of companies said they will reduce budgets this year, while only 20% said they would increase spending. The recession and fears of lower sales were prompting 75% to cut back, found the report.

"This Bellwether report suggests that adland in 2009 will be no place for the faint-hearted," said Moray MacLennan, president of the IPA. "Confidence has plummeted and the data suggests a steep decline in GDP for the first quarter."

Even online budgets aren't escaping the axe. Online advertising suffered a record reduction during the final quarter of 2008. Budgets for all main marketing activities were reduced in last quarter but "main media" was the hardest hit together with Bellwether's "all other" category, which encompasses PR, market research and event sponsorship.

Tags: advertising budget, Institute of Practitioners in Advertising, marketing spend, online advertising, recession, U.K.