Press Release

Confidence among marketers takes a dive

16 June 2005

Marketers predict gloomy future, and are planning radical cut backs on increases in marketing spend

The Chartered Institute of Marketing's (CIM) latest Marketing Trends Survey has found that confidence is declining in the marketing profession. And this insecurity is reflected in a sharp slow-down in the forecast growth for marketing spending.   

The survey, which questioned senior marketing professionals on their business and its prospects for the future, shows that marketers are significantly less likely to believe that they can achieve their sales plans than they were this time last year. In half of the 14 industrial and commercial sectors covered by the survey, at least 50% of respondents describe their current year's sales plan as 'very challenging' or 'unrealistic'. In the retail sector, critical because consumer spending accounts for 70% of the UK's GDP, nearly two thirds of respondents see their plans as 'very challenging'.

This means that the CIM confidence index, which compares sales plans with marketers belief in their likelihood of achieving those plans, has fallen dramatically since this time last year. During Spring 2004, the index stood at one of the highest levels ever recorded in the ten year history of the survey, but now it has tumbled to slightly below average.  

The down-beat attitude is mirrored in marketer's expectations about budget increases. UK firms are planning to increase their marketing spend by just 2.9%, a significant decrease on the 4.9% increase predicted in the previous survey last quarter. The largest growth in spending is expected in promotions and direct mail, where expenditure is predicted to increase by 3%. However, in both cases, this is still down on the figure recorded in the Winter survey. Sponsorship is likely to fare the worst, and expenditure in this sector is expected to fall by 0.2% over the next twelve months. No area of marketing expenditure is expected to grow at a faster rate than last year. 

Over half of UK marketing departments will remain the same size, and a third are likely to grow over the next twelve months. However, a trend is emerging that could give rise for concern. While 31% of those taking part in the survey said that they are likely to increase the size of their marketing department within a year, this figure has declined from nearly half (47%) in the Summer survey. A significant 9% are planning to reduce the number of staff they employ, compared to just 3% in the Summer report. 

According to Douglas McWilliams, economic adviser to The Chartered Institute of Marketing and Chief Executive of the centre for economics and business research (CEBR) the weakening in consumer spending is now starting to have an effect. 'After a nine year consumer boom, the combination of higher interest rates, increasing debt and a flattening housing market seem to be starting to feed through. So far, the UK economy has kept moving forward, partly on the back of rising government spending, partly on the continuing construction boom, and partly because of business to business sales remaining strong. But it appears that at least the marketing component of business to business sales is set to turn down as the year goes on.'

Paul Gostick, International Chairman of The Chartered Institute of Marketing said that there is however much marketing practitioners can do to improve their prospects for success - both for their business, and in their own personal careers. 'As budgets come under increased pressure, it is more important than ever for marketers to keep abreast of current thinking to ensure they continue to deliver maximum value. The well qualified professional marketer will be best placed to thrive in more demanding economic conditions.'

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