Marketing budgets to grow by 3% according to CIM

LONDON - Marketing spend is set to increase by nearly 3% this year according to a survey by the Chartered Institute of Marketing, but the advertising recovery will not be as speedy as previously hoped.

The findings back the IPA's Bellwether Report, released earlier this week, which said it found an optimism in the marketing industry not seen since the dotcom boom.

But the CIM survey, conducted among marketing professionals in November and December 2003, was more cautious in predicting recovery. It found that business confidence has come back to earth after the boost brought about by the end of the official conflict in Iraq, and questioned growth forecasts predicted by Chancellor Gordon Brown.

Tess Harris, international chairman of the Chartered Institute of Marketing, said: "After nine months of violently fluctuating expectations, it appears that levels of confidence have settled down and now match those of mid-2002. These results indicated we can expect a recovery but it will not be as speedy as previously hoped."

The companies surveyed said they planned to increase marketing spend by 3% on anticipated sales growth of 5.6%. Within the marketing departments, 26% of people surveyed said they anticipated an increase in the number of marketing staff while 9% were expecting a reduction.

Andy Viner, a partner at BDO Stoy Hayward, said: "Clients are reporting an increase in permanent recruitment activity, which reverses the recent trend of laying off staff and using freelancers over the past 18 months. However, any optimism should be tempered with caution -- agencies are still facing margin pressure and recovery is likely to be gradual rather than dramatic."

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