Report reveals advertising budgets were cut in Q2

A report by the Institute of Practitioners in Advertising (IPA) and accountants BDO has found companies slashed their marketing budgets in the April to June period.

The cut backs were due to increasing concern among companies that the economy will see slower growth in the second half of 2010.

The survey of 300 British companies for the IPA/BDO Bellwether report found that advertising budgets for almost all categories were revised down.

The survey found that around 20% of companies cut their advertising budgets in the second quarter compared to 15% who increased their budgets.

In the meantime, confidence also took a hit with around 25% of executives polled saying they were pessimistic about the financial prospects of their company, up from 20% in the first quarter.

Commenting, Chris Williamson, chief economist at Markit and author of the report, said: “The downward revision to marketing budgets in the second quarter is disappointing as it fails to build on the return to growth seen earlier in the year and highlights the fragility of the UK economic recovery.”

Meanwhile, Andy Viner, the head of media at BDO, added: “The second quarter BDO/IPA Bellwether report reveals a cautious and uncertain picture.

“After a strong rebound in Q1, optimism and confidence appear to be waning,” he added.

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