Report Predicts Worldwide Spending Upturn for Marketing

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Total marketing spending across the top national markets is expected to grow 3.4 percent in 2004 after forecasted growth of 1.1 percent in 2003, according to the London Business School's Marketing Expenditure Trends Report released yesterday.


Done in collaboration with the Paris-based global communications group Havas, the report is based on a survey of chief marketing officers in the top five national markets -- the United States, Japan, Germany, the United Kingdom and France -- and the emerging markets of China and Brazil.


The study found that the spending cutbacks in recent years reflect short-term market and economic conditions and that marketing budgets will rise as conditions improve.


The change in marketing expenditure from 2003 to 2004, according to the study, is 11.6 percent for China, 11.2 percent for Brazil, 6.3 percent for the UK, 4.6 percent for the United States, 2.0 percent for France, 1.0 percent for Germany and 0.3 percent for Japan.


The study found that the dramatic growth in China is expected to continue as a result of its rapid economic development and huge long-term market potential. Inflation accounts for much of the growth in Brazil.


Companies in all sectors are investing heavily in interactive marketing, the study said, as only Japan and France appear to lag in this area.


Interactive already accounts for 10 percent of marketing spend in business-to-business firms and 6 percent in business-to-consumer firms, the study said. Online promotions/incentives and permission-based e-mail are areas of particularly fast growth. But firms also are investing to improve the sophistication of their Web sites, including password-protected extranets, search-engine optimization and online sales and Web advertising, such as sponsored searches.


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