Communications and research consultants Blackfriars Communications project marketing spending at U.S. businesses will be nearly $615 billion this year, down $385 billion from 2005. Blackfriars' second annual sizing of the U.S. marketing market, announced earlier this month, finds 2006 marketing spending at 4.7 percent of revenue, down from 8.9 percent in 2005.

The manufacturing industry again spent the most on marketing in 2006 with spending of $59 billion.

Blackfriars also announced that it has set the Blackfriars Marketing Index at 136 for the third quarter of 2006. The Q3 index indicates that US companies expect to spend 36 percent more on marketing this quarter than they spent in an average quarter in 2005. Blackfriars also set its second quarter 2006 index of actual spending at 78, 68 points below the budgeted value in June.

"Marketing has struggled because of bad weather and higher fuel prices over the past twelve months," said Carl Howe, a principal of Blackfriars. "But if marketing were an industry, the $615 billion spent on marketing this year would still make it the ninth largest industry in the United States. It remains larger than the entire U.S. information and media industry."

Online advertising slows

A key finding of the survey was that advertising spending has fallen to $218 billion this year, of which $38 billion comprises online advertising. Online advertising is expected to consume seven percent of budgets, down from ten percent at the beginning of the year.

"Companies are cutting back on all forms of marketing from last year," said Howe. "But as they cut their budgets, they fall back on more traditional media and strategies. That's really too bad, because the measurability of online marketing allows executives to clearly demonstrate its value. That can be much harder to do with traditional media."

About the market research report

Blackfriars Communications' 28-page research report, "Sizing US Marketing 2006", includes 2006 projections for marketing spending overall and spending projections by type of activity. It also includes analysis of marketing spending in six vertical industries. It has detailed breakdowns and rankings of the dollars spent by those vertical industries in twelve different categories of marketing activity such as advertising (both online and offline), direct mail and telemarketing, direct email, events, Web site development, and collateral development.

Blackfriars distributes the Blackfriars Marketing Index each quarter as a benchmark for US marketing budgets and spending. To perform this research, Blackfriars collected data from 317 senior business executives about their marketing budgets, attitudes, and spending. Blackfriars then correlated this data with overall business spending from the 2002 U.S. Census and with gross domestic product data from the U.S. Bureau of Economic Analysis.

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