Global Marketers’ Budget Optimism Continues to Grow

April 20, 2012

warc-global-mktg-budgets-april-2012.jpgSentiment regarding budgets continues to steadily improving among global marketers, finds Warc in its April 2012 Global Marketing Index (GMI). The budget component score of the index moved to 53.7 in April, improving from a level of 51.5 in March, when it first passed the threshold score of 50 that indicates a generally improving environment. April’s score is about 10 points higher than 6 months ago, when the GMI was first launched and it was at a low of 43.9. April was also the first month that the budget index score for Europe passed 50 (50.4).

Optimism Grows in All Regions

warc-globalmarketingindex-by-region-jan-apr-2012-april2012.jpgWarc’s headline Global Marketing Index (GMI), which tracks overall industry opinion as a composite of marketing budgets, staffing, and trading conditions, rose from 57.4 in March to 58.1 in April. Respondents from the Americas were again the most positive, with headline GMI growing from 59.7 to 61.3 (a score over 60 indicates rapid growth). Sentiment among marketers representing the Asia Pacific also showed some growth, up from 57.9 to 58.3. While Europe remained behind in sentiment, it increased marginally from 55 to 55.2.

New Media Still Favored

As with previous months, digital (excluding mobile) and mobile channels continued to attract global spend in April, with index scores of 78.3 and 70.2, respectively, although both fell slightly from the previous month. Print again experienced the largest reduction in expenditure, with a score of 37.1, although that was a slight increase from 36.1 last month. TV was the only traditional medium to show net growth, rising from 48.8 in March to 51.6 this month.

Marketers are clearly allocating their budgets to the fastest-growing media: according to April 2012 figures from the IAB and PricewaterhouseCoopers, internet advertising revenues hit a record $31.7 billion in 2011, representing almost 22% year-over-year growth. Among the various digital advertising formats, mobile showed the fastest growth, up an impressive 149%.

Global Staffing Levels Drop, Steady in US

In terms of the worldwide staffing component index, recruitment showed a slight dip in April. The global staffing index dropped from 59.8 in March to 58.5 in April, which Warc insight suggests may reflect seasonal factors rather than the start of a trend.

Within the US, the marketing employment outlook is stable, says Bernhart Associates in its Q2 2012 Digital and Direct Marketing Report. According to its survey, half of companies plan to add staff this quarter, down slightly from 52% in Q1, though up from 45% a year ago. On an encouraging note, the proportion of respondents with a hiring freeze dropped from 19% in Q1 to 13% in Q2, with a corresponding drop in those planning layoffs (from 6% to 4%).

Other Findings:

  • Data from the Bernhart Associates report indicates that B2C companies lead the way in planned new hiring, at 54% of respondents, compared to 47% of B2B companies.
  • Layoffs at agencies, services, and marketers collectively have dipped to 3%, the lowest figure in the 12-year history of the survey.
  • The positions in greatest need for the quarter are analytic-related jobs, followed by marketing, web designers, sales, and account management. This was the first time in survey history that demand for web designers cracked the top 5.
  • The Warc global trading conditions component index continued its rise, reaching 62.1 in April, up from 60.8 in March. The metric stood at 54.4 in January.

About the Data: Warc compiles the Global Marketing Index by tracking the opinions of an online panel of 1,295 experienced executives working for brand owners, media owners, creative and media agencies, and other organizations serving the marketing industry. The data was collected from April 2-13, 2012.

The 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. 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 more distant the index is from the amount that would indicate “no change” (50 points), the greater the rate of change indicated. Therefore, an index value of 58 indicates a faster rate of increase than an index value of 53, and an index value of 40 indicates a faster rate of decrease than an index value of 45. A value of 100 indicates all respondents are reporting increased activity while 0 indicates that all respondents report decreased activity.

The Bernhart Associates findings are based on survey results from 384 organizations conducted in April.

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