Advertising growth to slow into 2001

Further evidence of a growth slowdown in the annual £15bn market for corporate advertising and marketing spending in Britain emerges today in the quarterly Bellwether report, released by the Institute of Practitioners in Advertising.

Further evidence of a growth slowdown in the annual £15bn market for corporate advertising and marketing spending in Britain emerges today in the quarterly Bellwether report, released by the Institute of Practitioners in Advertising.

The study shows that downwards revisions in advertising spending have occurred in the current quarter and are expected to take place in the final quarter of the fiscal year to March 2001. This followed rises in excess of budgeted expenditure increases in the first and second quarters.

The IPA said in a statement: "The survey findings ... suggest that continued economic growth will fuel rising marketing expenditures over the coming year but a recent easing of business confidence has caused the rate of growth to slow."

Chris Williamson, an analyst with NTC Research, which conducted the survey of more than 200 UK-based companies, said: "Advertising expenditure growth is likely to come down as the year goes on. It indicates some moderation in economic growth next year but we still see it as a good year for the economy and advertising."

The IPA's survey follows a warning from Granada Media, Britain's biggest terrestrial television group, that advertising revenue would be little changed in the year to September 2001 from levels recorded in the previous fiscal year. Worries about the health of the advertising market have seen stock prices slump for media groups such as Granada, Carlton Communications, magazine publisher Emap and Capital Radio.

The survey also said that internet advertising or sponsorship rose in the third quarter to an average 2.5 per cent of total outlays compared with 1.5 per cent in the second quarter. And the proportion of companies allocating 5 per cent or more of marketing budgets to internet-related activities rose to 14 per cent from 8 per cent over the same period.

However, more than 31 per cent of companies said they would spend nothing on the internet, up from nearly 26 percent in the second quarter.