Spending fall raises new fears over economy

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The Independent Online

Marketing spend fell in the last three months, the first such fall in a year, raising fresh fears about the UK economy.

Total spend on advertising and marketing could fall in 2012 and it will be "a close call", according to the Institute of Practitioners in Advertising's quarterly Bellwether survey.

This would be a major surprise given that a majority of marketing chiefs had told the IPA at the start of this Olympic year that they expected budgets to increase.

The advertising trade body blamed weaker-than-expected sales, which hit profit margins and forced brands to cut their ad budgets.

"However, the rate of budget trimming was only slight, with a net balance of just minus 1.1 per cent of companies signalling a reduction in marketing spend," said the IPA.

The survey found that the rate of spending by brands on sales promotions was at its highest level for five years.