Could spending on promotional items have risen? - By: Charlie Board

Business conditions in the UK remain difficult and firms are keeping a tight rein on their levels of spending.

However, many companies are aware that if they slash their advertising budgets, they will suffer in the long-term and may not be able to compete with rival firms.

One aspect of many enterprises' marketing strategies is the handing out of promotional items.

Promotional products can be a relatively cheap and effective way of enhancing organisation's profiles.

The latest IPA/BDO Bellwether survey published in October showed that marketing budgets for this year were revised up during the third quarter.

This may result in a rise in the use of promotional items.

According to the team responsible for conducting the study, the proportion of firms reporting an increase in their marketing budgets was slightly more than those signalling a decline, resulting in a net balance of 0.5 per cent.

Head of media at BDO Andy Viner said: "The upwards revision to marketing budgets, albeit marginal, is a welcome sign of optimism and we expect to see marketing expenditure as a whole rise in 2010."

However, he added that there are still fears over the future of the business environment.

Mr Viner noted: "The overall outlook is one of caution with companies having to respond operationally to the changing commercial landscape.

"We are seeing them take a tentative approach to the commitment of non-essential expenditure against a continued backdrop of looming public sector cuts and general economic uncertainty."

Meanwhile, IPA president Rory Sutherland suggested that a lack of certainty surrounding government spending and the sustainability of the economic recovery have led to firms remaining cautious.

Regardless of their fears, organisations that fail to make the most of promotional products may lose out. If they sacrifice such activity, along with other advertising strategies, they risk suffering a reduction in their profiles, which could be disastrous.

About the Author

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