The just-released Institute of Communications and Advertising’s latest quarterly survey of marketing budgets – with Canada Post as its new sponsor – found that all categories of marketing spend were revised upward in Q3, thanks to improved business performance, a drop in energy prices, and the economy holding up well despite higher interest rates. The resulting rising sales and profits prompted increased marketing spend.
Trimming of media budgets continued to drop, with just 8% of respondents reporting downward revision, while 18% reported upward revision.
Overall, one-in-five companies revised their annual budgets upward for the current year, while just 12% reported a decline. This represents a further improvement on already strong initial budget setting for the current year, and follows a record upward revision in Q2. The current year therefore looks set to be the strongest recorded since the survey began.
Conducted by NTC Research and based on input from a panel of 270 senior marketing execs in Canadian companies, the ICA/Canada Post survey suggests that rates of increase varied by delivery mode, with respective details as follows:
Direct marketing – further robust growth: Current DM budgets were revised up for the fifth successive quarter. The rate of increase signalled was weaker than the survey’s record high seen in Q2, but was above that recorded for total marketing spend, and was the second-strongest of all main survey categories. Upward budget revisions were reported by 15% of companies, compared to just 5% reporting a decline. Increases to budgets were commonly driven by greater experimentation with DM, increased sales revenues, plus a need to support new product launches.
Sales promotions – weaker trend evident: Current sales promotions budgets were revised up on average in Q3, as reported by 13% of survey panel member companies, compared to just 7% reporting downward revision. However, at +6.7%, the resulting net balance was the weakest recorded since the survey began and represented a marked contrast to the peak seen in Q2.
All other marketing – sees weakest gain: The ”all other’ marketing category saw the weakest upward revision of all main survey categories in Q3, with upward revisions reported by 12% of companies and downward revisions noted by 8%. This is despite the inclusion of Internet-related marketing in this category, which continued to follow the trend of above-average growth seen throughout the survey’s history. This suggests that the other constituents of this category – PR, market research, corporate communications and sponsorship – saw especially weak growth in Q3.
Internet marketing – continues to outperform: Internet marketing continued to show stronger growth than total marketing, as has been the case for the past three surveys. Some 22% of companies reported an upward revision to current Internet budgets, while only 2% reported a decrease, resulting in a net balance of +20% (against +8% for total marketing).
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