Economic concerns and weak sales prompted companies to slash their marketing budgets by the largest amount in two years, according to the Q4 2007 IPA Bellwether report.

The report, which measures quarterly marketing spend in the UK, revealed that 19 per cent of brands admitted to a decrease in marketing spend in the last three months of 2007, compared to 15 per cent that boosted budgets.

However, the outlook for 2008 isn’t entirely negative, with nearly half of companies planning to have larger marketing budgets than last year. Just one in six firms expected to cut budgets for the year ahead.

The biggest marketing spend reductions were by financial, FMCG and automotive companies, while brands in the IT, retail, travel and entertainment sectors increased budgets.

Television and press advertising was worst hit in Q4, with spend for traditional media hitting a net balance of -6.5 per cent.

Direct marketing spend also dropped in the fourth quarter, with a net balance of -1.3 per cent, compared with 4.1 per cent in the same period in 2006.

Brands appear to be continuing to plough money into the internet, with budgets up by a net balance of 15.8 per cent.