Marketing spend gained momentum in Q1

Today's survey of marketing budgets by the ICA and Canada Post paints an optimistic picture generally, but predicts that media adspend will not keep pace.

Budgets in key marketing sectors were revised upward again in Q1, according to a joint report by the Institute of Communications and Advertising and Canada Post released today. Registering the second-strongest boost seen since the survey began in 2003, one in five companies reported an increase to their existing budgets for 2007, while just 5% reported a decline.

Budget increases were commonly linked to improved corporate performance. However, the Q1 survey also saw a rise in the number of companies upping spend (especially on sales promotions) in order to stimulate weaker-than-anticipated sales.

All categories of marketing spend were revised upward in Q1, with Internet the biggest growth category, followed by sales promotions. Data on new budget-setting for 2007-08 indicate that growth will continue over the coming year. On average, marketing budgets have been set higher than 2006-07 actual spend, with just under half (48%) of all companies having set their budgets higher than the actual outcome for 2006-07, while only 16% set their budgets lower.

Provisional data for 2006-07 indicate that the fastest growing marketing category last year was main media advertising. However, this is set to change next year, with main media set to see the slowest growth of all marketing categories, in part due to companies growing more uncertain about the outlook for sales and profits over the coming year. ‘All other’ marketing (comprising mainly below-the-line activities) is set to see the fastest growth in 2007-08, followed by sales promotions and direct marketing.

The complete report is available at: