The Bellwether report asks marketers to indicate whether budgets have increased or decreased across a range of different media channels, and subtracts the percentage of those who say budgets went down from the percentage who say budgets went up, to come up with an index.

Traditional Sales Promotion was the channel which saw the greatest fall in Q2 2010, with an index of -11.5.

But Clive Mishon, chairman of the Institute of Promotional Marketing, points out that traditional Sales Promotion is now almost exclusively limited to the use of a limited range of promotional techniques in retail outlets, aimed at boosting sales over a short period.

Mishon says: "It is clear that the narrowcast media channels, specifically direct and internet, are taking a larger share of brand advertising budgets, and I do not see this changing. However, all our evidence has shown that promotional marketing makes up the majority of the content in these channels. This is reflected in the positive mood of our membership.”

Mishon adds: “Budgets for traditional Sales Promotion, which is now only a part of what our members do, are declining, according to the Bellwether. I suspect this is because there has been a real decline in value-added promotions, as price discounting activity (which may not be tracked by the Bellwether) dominates the agenda. Too much price discounting is good news for retailers, but bad news for brands!"

Institute of Promotional Marketing research suggests that as much as 80% of all direct marketing contains a promotional marketing message, while online, particularly search, is almost by definition all promotional marketing.

The Bellwether found that main media budgets were revised down in Q2 2010 compared to a modest upgrade seen in Q1 2010. The only two categories to see upward adjustments were direct marketing and the internet, although the rate of growth for internet-related budgets was the slowest for three quarters.