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warc-global-mktg-budgets-aug-2012.pngGlobal marketing budgets continue to slide this month, finds Warc [pdf] in its August 2012 Global Marketing Index (GMI). The budget component score of the index stands at 46.1, down from 47.5 in July, representing the lowest score of this year. This month’s decrease is primarily a result of a significant contraction in the Asia-Pacific region, falling from 50.8 in July to 46 this month. 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.

Marketing budgets in Europe also suffered this month, dropping from 42.3 to 40.9, which the report indicates is just 0.1 points above the all-time index low from December 2011. Marketers in the Americas were the only to record positive growth, increasing to a score of 53.5 in July, from 52.5 in June, and 50 in May.

US CMOs Downgrade Marketing Budget Forecast

Separately, data from Duke University’s Fuqua School of Business, which released its latest CMO Survey [pdf] in August, found that CMOs are projecting smaller budget growth over the next 12 months than they have in more than 2 years. For the latest survey, CMOs indicated that they expect marketing budgets to grow by 6.4% in the next 12 months. This is a step down from prior forecasts of 8.1% in February, 9.1% in August 2011, 6.7% in February 2011, and a high of 9.2% in August 2010.

B2B product companies appear to be those dragging down the overall average. Whereas in February they predicted 13.2% marketing budget growth over the next 12 months, in August, that projection had dropped to just 5.7%. B2B service companies maintained their 6.2% growth prediction, while B2C product companies increased their forecast growth (from 3.3% to 8.6%), as did B2C service companies (4.6% to 6.8%).

Overall Marketing Optimism Grows in the Americas

warc-globalmarketingindex-by-region-may-aug-2012-aug2012.pngMeanwhile, Warc’s headline Global Marketing Index (GMI), which tracks overall industry opinion as a composite of marketing budgets, staffing, and trading conditions, increased to 52.4 in July, from 51.3 last month. This growth was spearheaded by respondents from the Americas, who increased their headline GMI score from 56.2 to 57.7. While marketers from the Asia-Pacific region also recorded an improvement, with a score of 52.6, that was down slightly from 53 the month prior.

Marketers in Europe continued to show negative sentiment (48.9), though that score was a slight improvement from 48.1 in July.

Other Findings:

  • The Warc index for global trading conditions rebounded to a score of 54.4 from last month’s 51.9. The index had been on a steady downward trend from a score of 62.1 in April.
  • The index for staffing levels also increased from last month, from 54.6 to 56.6.

About the Data: Warc’s global panel (1,225 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: 6-17 August 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.

Duke University’s CMO Survey is conducted online twice a year. The latest survey was fielded from July 17 to August 3, 2012. 528 CMOs responded to the survey, of which 86% were VP level or above.

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