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Global Marketing Index

Released: July 24, 2014

Global marketers remain upbeat

  • Headline GMI recorded 56.6 in July, underpinned by robust trading conditions
  • Marketer optimism is highest in the Americas for fifth consecutive month
  • Budgeted spend for TV dips for first time since October 2013

Global marketers remained upbeat in July, 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 56.6 this month, where a reading of 50 indicates neutral sentiment. The reading represents flat growth from June’s index, but a 2.3 point rise from this time last year.

Marketer confidence was highest in the Americas for the fifth consecutive month, with a headline index reading of 57.7 in July, indicative of improving conditions overall despite a 1.6 point fall from June. Optimism was also high in Europe, where a headline index reading of 57.2 marked a 1.5 point uptick against June, and a 3.9 point rise against the same period last year. The growth in the headline index for Asia Pacific remained largely flat month-on-month, although the index was up half a point from a year earlier, on 55.1 (+0.2 points from June).

Strong trading conditions underpinned the positive outlook in both Europe and the Americas. Index readings of 59.9 and 59.7 respectively showed marketers in these regions are confident about business conditions. Indicators are also positive for Asia Pacific, where the index value registered 57.8.

The global index for trading conditions, which factors in the aforementioned regions, alongside Africa and the Middle East, stood at 59.2 in July: the first time the value has dipped below 60.0 since October 2013.

The second component index of the headline GMI, the index for marketing budgets, dropped 0.9 points globally from June to 53.2 in July, although this marked the eighteenth consecutive month of budget improvement.

The highest reading on the index for marketing budgets was registered in Europe, on 54.1 (up 1.3 points from June), followed by the Americas on 52.8 and Asia Pacific on 52.5 (down 0.6 points). In the case of the Americas, this marked a 3.7 point fall against June and 2.7 points down year-on-year.

The overall decline in the region’s index of marketing budgets was triggered by a tightening in budgeted spend on TV: the channel’s individual index recorded 42.8 in the Americas for July, a 8.6 point fall which left the index on its lowest value since the GMI began collecting data in November 2011.

Budgeted spend on TV is also declining in Asia Pacific, on 48.3 for July, but this marked a 1.0 point improvement against June. Conversely, the corresponding index in Europe recorded its tenth consecutive month of improvement, with a reading of 55.6 in July up 4.1 points against the previous month.

The global index for TV budgets stood at 49.6, offering the first signal of declining spend since October 2013.

Elsewhere, mobile and digital (excluding mobile) look set to maintain strong budget growth relative to other media, with global readings of 71.9 and 75.0 respectively for July. Planned digital spend was highest in Asia Pacific on 78.0, after an index rise of 2.1 from June.

Globally, the indexes for traditional media, including press (35.4), radio (43.7) and out of home (48.9), all signalled a net decline in budgeted spend this month. However, the index for out of home marketing in Europe suggested budgets were at a two and a half year high, recording 51.8 after a strong 4.3 point month-on-month growth. The third and final component of the headline GMI –the index for staffing levels –rose by 1.6 points this month to 57.6. For the eighth consecutive month, the rate of hiring was highest in the Americas, on 60.5, followed by Europe (57.5) and Asia Pacific (54.9).



 











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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