Global Marketing Budgets Decrease

Marketing expenditure levels continue to decline around the world, with Asia Pacific and Europe witnessing the most substantial cutbacks, according to Warc’s latest Global Marketing Index. Based on data from a panel of 1,225 executives, the monthly reading for marketing spend reached 46.1 points in August, on a scale where scores over 50 points show conditions are improving, and those below this benchmark reflect the opposite.

In reflection of the increasing pressure weighing on the sector, investment rates have dropped in eight of the 11 months since the first edition of the GMI was published. The figure for August also constituted a decrease of 1.4 points compared with July, and was mainly driven by a downward trend across Asia Pacific, where totals fell by 4.7 points, to 46 points.

The situation remained largely unchanged in Europe, albeit on a highly negative 40.9 points. The Americas, by contrast, posted an improvement from 52.3 points to 53.5 points month on month. Indeed, the region has stayed in positive territory on this measure since November 2011, in stark contrast to the considerable fluctuations seen in Asia Pacific and Europe.

Suzy Young, Warc’s data editor, said:

Marketers in Asia Pacific and Europe are reducing budgets. In the months ahead, it will be interesting to see if the sudden dip for Asia Pacific is representative of a more deep-rooted downturn.

Looking at the allocation of marketing budgets by channel, digital is still in the strongest position, just ahead of mobile, clearly indicating the preference among brand owners for new media. Traditional channels such as press and radio faced rather greater challenges. Looking more broadly, the headline GMI – encompassing marketing expenditure, staffing levels and trading conditions – stood at 52.4 points in August, compared with 51.3 points in July.

When assessing the business climate, global ratings came in at 54.4 points, a gain of 2.5 points month on month. The Americas had the best returns on 60.2 points, beating Asia’s 54 points and Europe’s 50.6 points. Turning to corporate headcounts, the international figure was 56.6 points, with the Americas on 59.4 points, Asia Pacific on 57.7 points and Europe on 55.1 points.
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