The Institute of Practitioners in Advertising's quarterly Bellwether Report, has found that nearly 25% of companies said they would increase spend compared with 9% saying that they planned to decrease their DM budgets for the quarter.
It also says that in setting new budgets, on average there will be a 30% increase for the 2004/2005 financial year, more than for any other discipline.
David Payne, head of direct marketing at the IPA, said: "The latest Bellwether Report reconfirms the trend which has been emerging in recent months which suggests that direct marketing is increasingly being favoured by marketers as an effective technique to communicate with their customers."
Overall, 49% of companies reported that marketing spend was due to rise for the 2004/2005 financial year, a figure not seen by the Bellwether Report since 2000.
It is also the first tine since 2000 where media adspend was revised up, with some 33.3% of companies surveyed saying that the advertising budget for the year was higher than last year, and 16.7% saying that it was lower.
Sir Martin Sorrell, chief executive of the WPP Group, said: "The IPA
Bellwether Report demonstrates yet again the recovery in advertising and marketing services spending in the UK. This follows the trend we have seen elsewhere, but in a milder form.
"There are also indications that advertising and marketing services spending will stabilize or grow as a proportion of GNP in 2004. In addition, it appears that marketing services spending in direct, internet and other more measurable areas is being favoured over classic media spending."
Stephen Woodford, IPA president and chief executive of WCRS, said: "The current picture reflects the most positive climate across all sectors since the fourth quarter of 1999."
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