Report: UK online ad budgets up, but overall cuts may cause downturn

Posted by Leah McBride Mensching on July 12, 2010 at 4:45 PM

Even though ad spending online continues to increase in the United Kingdom, cuts to other areas are causing growing worry that a "double dip" downturn may ensure, according to the latest IPA/BDO Bellwether survey, the Financial Times reported today.

About 20 percent of companies cut their budgets in the second quarter, while 15 percent increased their budgets, according to the survey of 300 British companies. Marketing budgets were on the upswing earlier this year, but between April and June, they fell because "firms became concerned over a prolonged period of stagnation," the Daily Mail reported.

Markets are still expect to increase in 2010 compared to last year; however, it is unlikely the increases will happen as quickly as previously expected, Dow Jones explained. The survey illustrates this new "phase of slower growth."

"It is clear that there are increasing signs that uncertainty over economic prospects continue and that corporates remain focused on cost control against a backdrop of the risk of a double dip," Andy Viner, head of media at accountancy firm BDO, told MediaGuardian. "On a more positive note certain areas of marketing spend such as internet advertising continue to grow driven largely by technological factors such as the expansion in social media together with the desire of advertisers for increased measurability and accountability and a lower cost of investment."