U.S. Firms Planned to Spend Third of Annual Marketing Budgets in Q4 06: Blackfriars Report

US companies are expected to spend over a third of their annual marketing budgets in the fourth quarter, a 50% increase over what they spent in an average quarter in 2005, according to the latest Blackfriars Communications report "Marketing 2006: A Make Or Break Fourth Quarter". 

According to the survey of over 100 US senior executives, the actual Q3 marketing spending was only 54% of budget, pushing down Blackfriars' Q3 2006 index of actual spending to 74, the lowest value in two and a half years. For the full year 2006, actual marketing spending remains below the levels of 2005 and might well be the lowest since 2003. 

Here are other key marketing trends and insights from the Blackfriars survey:

  • Bulk of third quarter spending went to offline advertising, which grew to 41% of marketing budgets, as total advertising spending  approached half of marketing budgets. Te percentage of marketing budgets being spent on online advertising fell to 8%. 
  • Although companies started this year with 13% higher marketing budgets than 2005, they have spent an average of only 45% of their 2006 marketing budgets. With the exception of offline advertising, all of Blackfriars Marketing Category Indices were half or less than half their 2005 benchmark values.
  • Marketing budgets for 2007 are forecast to rise 9.5%. Blackfriars forecasts a strong off-line advertising focus in 2007, at least for the first half. 
  • Three quarters of executives now say that their firms demand marketing prove its value, and only half believe their marketing provides their company a competitive advantage.
  • Companies that measure marketing remain more satisfied with marketing than non-measurers. Measuring firms are planning bigger budget allocations for Q4 compared to non-measuring firms by a margin of nearly 10 percentage points of the annual budget. 

"While firms budgeted large amounts for marketing in 2006, they just didn't spend those budgets," said Carl Howe, a principal of Blackfriars. "With executive attitudes toward marketing faltering, businesses fell back on tried and true media types that they could defend."

Methodology: Balckfriars surveyed 109 senior business executives - with titles of CEO, President, Vice President, General Manager, Owner, and others - between November 1 and December 5, 2006 using Web surveys at two independent research companies. 

Check at Blackfriars website for more details on the survey and the "Marketing 2006: A Make Or Break Fourth Quarter" report.

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