Ad budgets in the UK set to rise in 2011

UK companies are planning to increase their advertising and marketing spends in 2011, after cutting back on their budgets in the last quarter of 2010, according to a report published by the Institute of Practitioners in Advertising (IPA).

Andy Viner, head of media at BDO LLP, said, ''The outlook for 2011 has started positively as budget setting for this year looks set to be higher than actual spend for 2010.'' He added that internet and direct marketing are the two areas the companies were focusing on. 

22 per cent of the companies contributing to the report said they had revised down their marketing budgets in the fourth quarter, while 17 per cent of companies said they had raised the budgets, the latest Bellwether report by the IPA in collaboration with accountancy firm BDO LLP has revealed.

Q4 2010 saw a 5.4 per cent decline in ad budgets, the highest for a year, as companies grappled with the uncertainties surrounding the economic recovery in 2011.

''That these latest figures reveal a decline in confidence is disappointing, but characteristic of the uncertain climate we find ourselves in,'' said Rory Sutherland, president, IPA and vice-chairman, Ogilvy Group UK.

The ad budgets had recorded a rise after a two and a half year gap to 4.5 per cent in Q1 2010 but had later slumped down by 4.6 per cent in Q2, and had seen a marginal increase of 0.5 per cent in Q3.