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Global Marketing Index

Released: August 21, 2014

Global marketer confidence dwindles

  • Headline GMI recorded 54.4 in August
  • Trading conditions rapidly improving in Europe
  • Budgets decline in Asia Pacific for first time since September 2013

Marketer confidence fell in August, yet conditions were still seen to be improving overall, according to Warc’s latest Global Marketing Index.

Globally, the headline GMI measure –which takes into account marketers’ expectations for trading conditions, marketing budgets and staffing levels –recorded an index value of 54.4 this month, where a reading of 50 indicates neutral sentiment. The reading is a fall of 2.2 points from July’s index and a 1.2 point fall from this time last year.

Marketer confidence was highest in Europe, with a headline index of 56.0 in August, suggesting improving conditions overall despite a 1.2 point fall from the previous month.

Optimism was also high in the Americas, though a headline index reading of 55.2 marked a 2.5 point fall against July and a 3.1 point fall from the same period last year. Asia Pacific’s headline index was at 51.8 in August, after a fall of 3.3 points from July.

The global index for trading conditions, which also includes Africa and the Middle East, stood at 56.8 this month, marking a 2.4 point fall from July.

The highest level of optimism by this measure was in Europe, with an index reading of 61.0 suggesting rapidly improving conditions after a 1.1 point rise month-on-month.

Trading conditions were also seen to be improving in the Americas and Asia Pacific, where indexes of 55.9 (-3.8 points) and 53.2 (-4.6 points) respectively showed marketers in these regions are confident about current business conditions.

The second component index of the headline GMI, marketing budgets, showed flat growth globally from July to record 53.1 in August, marking the nineteenth consecutive month of budget improvement.

The highest reading on the index for marketing budgets was registered in Europe, on 55.5 (up 1.4 points from July), followed by the Americas on 54.2 (also up 1.4 points). An index reading of 48.2 (-4.3) in Asia Pacific marked the first month of declining budgets in the region since September 2013.

The overall decline in Asia Pacific’s index for marketing budgets was triggered by a tightening in budgeted spend on mobile. The channel recorded 64.4 in Asia Pacific for August, and while this was indicative of rapidly growing budgeted spend, it is the region’s lowest index value since April 2013.

Furthermore, budgeted spend on TV is declining in the region. The index reading for this measure stood at 44.6, a 3.7 point drop from the previous month. The Americas rose 5.2 points from July, yet TV budgets there showed a net decline, on 48.0. Only in Europe are TV budgets rising: the index recorded 54.1 in August.

Across all regions, the index for TV budgets stood at 49.7, signalling another month of declining spend after flat growth from July.

Elsewhere, mobile and digital (excluding mobile) look set to maintain strong budget growth relative to other media, with global readings of 67.7 and 73.4 respectively for August. Planned digital spend was highest in Asia Pacific, on 75.0, followed by Europe on 72.1 and the Americas on 71.9.

Globally, the indexes for traditional media, including press (35.4), radio (43.3) and out of home (47.8), all signaled a net decline in budgeted spend for the month. However, the index for out of home marketing in Europe suggested budgets there are improving, recording 50.5, although this marked a 1.3 point fall from July.

The third and final component of the headline GMI –the index for staffing levels –fell by 4.3 points this month to 53.3. For the ninth consecutive month, the rate of hiring was highest in the Americas, on 55.5, followed by Asia Pacific (54.1) and Europe (51.5).


 











Methodology 
The Global Marketing Index results are calculated by taking the percentage of respondents that report that the activity has risen (“Increasing") and adding it to one-half of the percentage that report the activity has not changed (“Unchanged"). Using half of the “Unchanged" percentage effectively measures the bias toward a positive (above 50 points) or negative (below 50 points) index. As an example of calculating a diffusion index, if the response is 40% “Increasing," 40% “Unchanged," and 20% “Reducing," the Diffusion Index would be 60 points (40% + [0.50 x 40%]). A value of 50 indicates "no change" from the previous month.

The more distant the index is from the amount that would indicate "no change" (50 points), the greater the rate of change indicated. Therefore, an index value of 58 indicates a faster rate of increase than an index value of 53, and an index value of 40 indicates a faster rate of decrease than an index value of 45. A value of 100 indicates all respondents are reporting increased activity while 0 indicates that all respondents report decreased activity.



About the Index 
The Global Marketing Index provides a unique monthly indicator of the state of the global marketing industry, by tracking current conditions among marketers.

Our global panel (1,225 members) consists of experienced executives working for brand owners, media owners, creative and media agencies and other organisations serving the marketing industry. The panel has been carefully selected to reflect trends in the three main global regions: Americas, Asia Pacific and Europe.




About Warc 
Warc is the global provider of ideas and evidence to marketing people. It has produced trusted and independent data on advertising expenditure and media costs for more than 25 years, and has partnerships with leading advertising organisations in more than 80 countries. Warc’s premium online service, www.warc.com, is the largest single source of intelligence for the marketing, advertising and media communities worldwide. With subscribers in over 100 countries, warc.com is a unique resource relied upon by major creative and media agency networks, market research companies, media owners, multinational advertisers and business schools, to help tackle any marketing challenge. In addition to the online service, Warc publishes five magazines, provides industry data and runs events.

To find out more about Warc, take a free trial at www.warc.com/trial.

 
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