The latest IPA Bellwether report reveals a cut in marketing budgets for the first time in a year. 

The downward revision in the Q2 2012 report reflects ongoing pressure on marketers to cut costs as profit margins continue to be hit by weaker than expected sales.

However it is a marginal drop – 23% of companies report a cut in advertising spend while 22% report a rise. It therefore remains to be seen whether or not total marketing spend will increase this year. 

Internet advertising budgets saw the greatest rise, up by 5.1% and sales promotion budgets saw the strongest rate of growth in almost five years (from 0% to 4.5%). 

Main media, direct marketing and all other below-the-line marketing and advertising were revised down. 

IPA president, executive chairman and partner at Karmarama, Nicola Mendelsohn said: “With renewed concerns surrounding the economy both at home and abroad, in particular the problems surrounding the eurozone, it’s not surprising the signs are less encouraging.”

Mendelsohn says business confidence isn’t down to low levels seen in 2011 and adds: “We shall wait and see how things evolve and if caution continues, but look forward to key events like the Olympics which we expect will provide a welcome boost.”

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Smarayda Christoforou