Rate of decline in ad spend slows for consecutive quarters, says Bellwether

The latest report confirms the assertion of the previous survey, which signalled a return of confidence to the advertising market.

However, the signs of economic downturn are far from receding - the rate of decline in marketing spend over the period from April to the end of June remains severe.

Budgets were revised down for the seventh consecutive quarter, with only 10% of companies surveyed revising their 2009 marketing budgets upwards. 38% reported a reduction.

Despite the slowing rate of decline, the majority of categories suffered downward revisions in Q2 2009 - main media advertising dropped 18.4%, internet advertising was down 7.9%, sales promotion fell 8.8% and direct marketing was revised downwards by 7.5%.

The only media category whose rate of decline accelerated was internet search; yet it remains the most resilient category with a 5.4% fall.

Businesses were tentatively optimistic about the future. The report predicts that the rate of decline in media advertising spend will slow further as the industry moves into the second half of 2009.

One in three companies reported their financial prospects were improving, while one-in-four said they had deteriorated.

Jim Marshall, chairman of Starcom and the IPA Media Futures Group, said while the media industry is still "braced for a very tough six months", the prospects for 2010 look "more positive".

He said: "Such optimism should be treated with some caution, but it is a significant indicator that the worst of the recession is coming to an end."