SPENDING on advertising budgets is set to fall even further, according to the latest research, but local agencies are insisting that would be a mistake in the middle of an economic downturn.

The latest Institute of Practitioners in Advertising Bellwether report, often seen as an indicator of wider economic confidence, states that marketing spending is facing more-drastic cuts than at any time in the last nine years.

It said that just 7% of the 300 companies surveyed increased their marketing spending in the last quarter of 2008 and that initial budgets for 2009 were being set below 2008 levels for the first time since the survey of businesses started in 2000.

LRCD managing director Tom Robertshaw (pictured) accepted there had been some budget restraint shown by companies and clients but said they could be the ones missing out once the economy recovers.

‘It is easier to slash advertising budgets than it is to make other cost savings and, as such, we have noticed that some of our clients have reduced budgets for this year. Having said that, we have also seen a rise in some client spending.

‘Those who have a value offering or who are offering customers deals at this time are keen to get their message across more strongly than ever. With consumer spending being at a low, the marketplace is very competitive.’