The survey of more than 100 marketing leaders reveals that only 40% of them think they will be able to hang on to their agreed 2008 budget and about the same number foresee a budget cut as a result of an economic downturn.
Branding, advertising and traditional media spending will be the hardest hit categories, which will directly affect ad agencies.
The report predicts large changes ahead for the advertising and media industries. To reduce the impact of these cuts agencies will accelerate the integration of new media, strengthen their digital marketing practices and invest in communities for market and consumer intelligence.
It also expects these budget cuts in traditional media to affect the TV industry, forcing cable companies to speed up services like targeting TV ads via set-top boxes and ad-supported video on demand.
The biggest change, according to Forrester, will be a levelling of the playing field for large and small brands. Large brands have bigger budgets to cut therefore leaving room for smaller niche brands to use new advertising tactics to develop the same mindshare with their target audience as the big brands.
The report was written by Japp Favier, vice-president and research director at Forrester.