Marketing budgets are down again this month, finds Warc [pdf] in its July 2012 Global Marketing Index (GMI). The budget component score of the index stands at 47.5, relatively unchanged from 47.3 in June, though down from a high of 53.7 in April. And while optimism is up in the Americas, it continues to drop in Europe. The threshold score for the index is 50, meaning that a score above 50 indicates a generally improving environment, while a score below 50 indicates a generally declining environment.
The index for European marketing budgets is at 42.3 this month, down from 44.1 in June. Conversely, the index in the Americas improved to 52.3 from 50, while the index score for Asia-Pacific also increased from last month’s 47.3, crossing the threshold score at 50.8.
UK Budgets Revised Down
The latest IPA Bellwether survey of UK marketers released in July mirrors Warc’s findings on budget outlook in Europe. The IPA survey shows that marketing budgets in the UK were revised downwards in Q2, for the first time in a year. Even so, the decline was muted, with only a slightly greater amount of companies reporting a decrease as opposed to an increase in budgets (23% and 22%, respectively).
Overall Optimism Up in Americas, But Down Globally
Meanwhile, Warc’s headline Global Marketing Index (GMI), which tracks overall industry opinion as a composite of marketing budgets, staffing, and trading conditions, dropped to 51.3 in July, from 52.4 last month. Respondents from the Americas (56.2) and Asia-Pacific (53) recorded improvements, but while the Americas rose from a score of 53.8, the Asia-Pacific’s index score represented a slight decline.
Marketers in Europe, by contrast, showed negative sentiment (48.1), after showing neutral sentiment (50) last month. In the UK in particular, as evidenced by the IPA results, business confidence decreased in Q2 as executives’ perspectives on the prospects for their industry declined.
- The Warc index for global trading conditions declined from last month’s 54.1 to 51.9 in July, though it remained in positive territory. The index has been on a steady downward trend from a score of 62.1 in April.
- The index for staffing levels also dropped from last month, though marginally, from 55.7 to 54.6. The Americas posted a score of 60.5, indicating a rapidly improving environment.
About the Data: Warc’s global panel (1,295 members) consists of experienced executives working for brand owners, media owners, creative and media agencies and other organisations serving the marketing industry. The panel has been carefully selected to reflect trends in the three main global regions: Americas, Asia Pacific and Europe.
Data collection period: 2-13 July 2012. The Global Marketing Index results are calculated by taking the percentage of respondents that report that the activity has risen (“Increasing”) and adding it to one-half of the percentage that report the activity has not changed (“Unchanged”). Using half of the “Unchanged” percentage effectively measures the bias toward a positive (above 50 points) or negative (below 50 points) index. As an example of calculating a diffusion index, if the response is 40% “Increasing,” 40% “Unchanged,” and 20% “Reducing,” the Diffusion Index would be 60 points (40% + [0.50 x 40%]). A value of 50 indicates “no change” from the previous month.
The Bellwether Report is researched and published by Markit Economics on behalf of the IPA. First published on the 17th July 2000, it features original data drawn from a panel of around 300 UK marketing professionals