Marketing confidence has started to recover, according to the latest Bellwether survey from the Institute of Practitioners in Advertising.

Business confidence has picked up from the all-time low of Q4, with the percentage of companies believing their prospects have improved rising from 5% to 14%.

And while marketing budgets are still falling, the rate of the decline in marketing spend slowed in the first quarter of 2009 compared with the fourth quarter of 2008, suggesting budget cutting may have reached its peak at the end of last year.

Chris Williamson, chief economist at research company Markit (pictured), who wrote the report for the IPA, says: “In the downturn, companies are very much concentrating on Value For Money as opposed to brand building. They are using price cuts and price promotions to boost demand as soon as possible. We know that clients are moving money into direct marketing and sales promotion.”

Although the index for sales promotion is lower than it was in Q4 2008 at -13.7, it is still well above most other marketing media, which suggests that sales promotion will continue to grow its share of total marketing expenditure during the recession. Direct marketing was on -13.0, and internet advertising on -10.0: but the index for main media advertising was -34.1, while it was -31.3 for ‘all other’ media, which covers PR PR, events sponsorship and market research.