Ads are falling in importance in the UK compared to other marketing activities, at least in terms of budget, according to the Chartered Institute of Marketing's "Marketing Trends Survey," conducted by Ipsos MORI.
Marketers surveyed said that advertising would account for just under 15% of their 2007 marketing budgets. Lead generation, customer relationship management (CRM), direct mail and field marketing were each estimated to account for 11%-12% of marketing budgets.
Although respondents said they planned to increase spending on online marketing in the current sales year by an average of 3.6%, they also said the average amount they spent on advertising would fall by 0.2%.
Only one in 12 companies used any of the five types of digital communications covered by the study, such as viral marketing and corporate blogs, at least "a fair amount."
Nearly all respondents said that technology was one of the main three catalysts for change. Changes in consumer attitudes were listed by nearly two-thirds of respondents, while 45% named global competition and 36% named the development of CRM.
Geoff Hurst of the Chartered Institute of Marketing said, "It's interesting to note that a significant majority of marketers are still not making use of the full spectrum of technologies available to help them communicate with customers. In fact, the numbers answering 'not at all' when asked how regularly they used podcasts, corporate blogs, mobile marketing and viral marketing have actually increased since the survey was last conducted in Autumn 2006."
UK marketers who do use online ads will pour more money into them than ever.
Paid search advertising was the fastest-growing segment of online advertising in the UK in 2006, jumping 58% to £531 million ($1.04 billion) in the first half of 2006, according to data from PricewaterhouseCoopers,
Internet Advertising Bureau UK, the World Advertising Research Center and OPera Media. The UK search market will continue to grow as search gains visibility and marketers better understand how to optimize customer paths to purchase.
The eMarketer UK Online Advertising report will be published in July 2007. To be notified when it is released, click here.