Online Suffers as UK Advertising Budgets Continue to Fall

By Peter Young

According to the IPA’s Bellwether report, UK advertisers substantially reduced their budgets in the final 3 months of 2008, with just 7% of respondents saying they had increased budgets during the final quarter of 2008. That was in stark contrast to the 49% who reported that they had cut their marketing spend during the same period. It was also the fifth successive quarterly reduction in spend, with initial forecasts suggesting 2009 is set to see further cuts.

One of the most noticeable statistics to come from the report however was that online advertising spend—which had managed to escape the downward trend in Q3 2008—started to see a decline with 7% of organisations reporting a reduction in spend for the following quarter (Q4). It should however be caveated with the fact that online was affected less than any other channel, indicative of further growth in terms of overall UK market share—according to IPA estimates now around 10% of total advertising spend.