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Business News

Increased spending on marketing fuels recovery hopes

Hopes that the UK economy might avoid a triple-dip recession have received a boost as a survey showed marketing spend grew at its fastest rate for over a year, despite the tough economy.

The Institute of Practitioners in Advertising's quarterly bellwether survey said a net 1.1 per cent of companies increased spend in the last three months of 2012, the highest since the third quarter of 2011.

The trade body found a majority of advertisers planned to increase budgets this year and ad spend should "steadily accelerate" by 2017.

Internet advertising again saw the biggest growth in the past three months while so-called "main media" such as TV and newspapers were flat. Sales promotions, public relations and events were all cut.

Chris Williamson, the chief economist at research firm Markit and author of the Bellwether report, warned "companies remain cautious" because of "uncertainty about the economic outlook at home and abroad".

Michael Greenlees, the chief executive of Ebiquity, which measures the effectiveness of media spend, said: "There's no doubt that the economy is acting as a brake." Multinational clients, representing around 75 per cent of Ebiquity's turnover, are most keen to conserve cash, for example, by delaying payment for 90 days, he said.

Clients want to monitor their ad spend, helping to boost Ebiquity's sales by more than a quarter in the half-year, with underlying profits up 20 per cent at £2.7m.