Companies continued to increase planned advertising spending in the third quarter according to a quarterly survey of UK marketing managers, despite the threat of economic downturn in some sectors.

The Bellwether survey, published on Tuesday by the Institute of Practitioners in Advertising, revealed that corporate profitability continued to influence advertising budgets ahead of concern over oil prices and rising interest rates.

The latest figures mark the longest period of sustained advertising growth in the UK market since 2000.

Of the 250 respondents, 81.6 per cent chose to maintain or increase media budgets during the quarter. However, some market watchers believe that current rate of growth may not be sustainable.

Martin Sorrell, chief executive of WPP, said he anticipated overall marketing spend to increase at a slower rate next year because of a number of economic factors. ?If industry is growing at 3 to 4 per cent this year we are saying 2 to 3 per cent for next year, so there may be a slight adjustment,? he said.

Chris Williamson of NTC Research, author of the survey, said: ?There are indications now that consumers are beginning to feel effects of high interest rates, and whether we start to see an effect of that remains to be seen.?

Sectors that revised planned advertising budgets down in the third quarter included consumer durables, fast-moving consumer goods, entertainment and media.

Most of the growth recorded in the survey was underpinned by the service sectors and the financial sector in particular with an additional boost from events such as the Olympics and Euro 2004.

Zenith Optimedia, the media buyer, predicts that national press will join television to enjoy strong ad revenue growth sectors in real terms this year.

Antony Young, chief executive of Zenith said: ?The national press is continuing to recover in 2004, consistent with spending increases from retail and telecoms. The long-awaited growth from finance began in the second quarter of 2004 and carried on into July.?

Numis Securities, the investment bank, remained similarly bullish.

www.warc.com/bellwether

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