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Companies are spending less on marketing due to insecurity over the economic climate, a recent report has revealed.
The Institute of Practitioners in Advertising (IPA) published its second quarter survey yesterday (July 12th), which showed 20 per cent of companies reduced their marketing budget over the three-month period, compared with 15 per cent that increased it.
Marketing strategies may suffer under the new trend, which also revealed business outlook overall was considered poor, with confidence among respondents the lowest in 12 months.
Customer segmentation could enable companies to scale back their marketing expenditure while still supporting trade consolidation or expansion, by providing targeted campaigns that will reach relevant customers in a cost-effective way.
Chairman of the IPA Rory Sutherland commented: "That we are seeing a more cautious approach to marketing spend compared to Q1 is not surprising due to the uncertain nature of our economy at the moment and in the wake of the recent Budget."
However, a more cautious approach should not necessarily signify blanket cuts in the marketing budget.
Portrait Software suggests customer segmentation may help companies understand the needs and preferences of consumers, meaning a well-directed campaign could save money while engaging clients and raising brand loyalty.
This method might be optimized by using customer analytics, allowing organizations to gauge data relationships and plan future campaigns, argues the marketing solutions provider.
Although the rate of spending on marketing operations is expected to fall, overall budgets are predicted to increase, according to IPA statistics.
This could suggest businesses understand the value of promotional strategies in a difficult economic climate and are prepared to protect marketing spend as an investment in future business expansion.