Global Marketers Limit Spend As Eurozone Crisis Escalates

May 24, 2012

This article is included in these additional categories:

Asia-Pacific | Europe & Middle East | Global & Regional | Staffing

warc_gmi_585.jpgMarketing budgets took a sharp downturn in May 2012 across the three regions (Europe, Asia/Pacific and the Americas) measured in Warc’s Global Marketing Index (GMI). The Index dipped from 53.7 in April to a near-neutral growth level of 50.3 this month, possibly reflecting increased uncertainty due to the economic situation in the eurozone. An index above 50.0 indicates improvement, below 50.0 indicates decline.

The GMI, launched in October 2011, provides a unique monthly indicator of the state of the global marketing industry, by tracking current conditions among marketers.

Warc’s global panel consists of experienced executives working for brand owners, media owners, creative and media agencies and other organisations serving the marketing industry. A GMI reading of 50 indicates no change, and a reading of over 60 indicates rapid growth.

warc_gmi_regions_585.jpgMay’s global headline GMI – which combines readings from trading conditions and staffing as well as marketing budgets – dropped to 55.3, down from 58.1 last month. While marketers still believe that conditions are generally improving, the outlook has worsened in recent weeks and confidence levels are now similar to those experienced at the start of the year.

Trading Conditions, Budgets and Staffing

Data for trading conditions, another component of the headline GMI, remains positive on 57.3, although this is a marked decline from April’s high of 62.1. European marketers witnessed the biggest monthly drop on this index, as May’s data showed 54.7, almost six points down on the previous month.

The global index for staffing levels maintained its value in May compared with previous months. It recorded a reading of 58.3, very slightly down on April’s 58.5. In contrast to results for trading conditions and marketing budgets, marketers in Europe and Asia Pacific saw an upward trend in staffing levels. But this pattern was not followed in the Americas, where the index value for staffing levels fell to 57.4 in May from 62.9 last month.

Commenting on the May 2012 GMI results, Suzy Young, Data Editor at Warc, added: “As the eurozone enters yet another period of crisis, with the outcome uncertain until the Greeks head to the polls again on June 17, it is not surprising that marketers have chosen to limit spend at this time. I would expect similar trends to be repeated in June.”

Warc is a London-based marketing analyst group, and publisher of the journals Admap, Market Leader, International Journal of Advertising, Journal of Advertising Research and International Journal of Market Research.

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 crosses three main global regions: Americas, Asia Pacific and Europe. Data collection period: 7-18 April 2012. GMI 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. The more distant the index is from the amount that would indicate “no change” (50 points), the greater the rate of change indicated. A value of 100 would indicate that all respondents are reporting increased activity while 0 indicates that all respondents report decreased activity.

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