Following two consecutive quarters of rising marketing budgets in the UK, the year ended on a flat note, with the net balance registering at 0.0%, according to the Q4 2025 IPA Bellwether Report. The majority of Bellwether respondents (57.4%) left their marketing budgets unchanged over the course of the quarter.
According to anecdotal evidence from Bellwether respondents, cost pressures, muted economic activity and budget constraints led to a re-evaluation of marketing budget allocations, with the Autumn Budget mentioned as a headwind in the final quarter. Escalating geopolitical tensions, global and domestic policy uncertainty, US tariffs and fears of an AI-fuelled stock market bubble also fuelled uncertainty.
The breakdown of the seven monitored categories showed that budgets were raised for PR and events. The net balance for PR rose from +2.5% to +3.5 in Q4. However, the net balance of firms raising the spend for events fell steeply from +10.9% to +1.4%. Main media and sales promotions budgets both recorded no change to their budgets in the final quarter of 2025 (0%).
The most pronounced decline was seen in out-of-home marketing, where the net balance fell to -17.6%, down from -15.2% in Q3. Audio emerged as the second-worst performer, while published brands and video also saw reductions, as did market research and direct marketing.
Initial budget setting shows that a net balance of +1.7% of firms predict an increase in total marketing spend across the 2026/27 financial period. This marked one of the weakest preliminary outlooks in the Bellwether survey history, which started at the turn of the millennium.
Respondents often pointed to challenges raising the case for greater discretionary expenditure, particularly in an uncertain and downbeat economic environment. Pressure to generate a greater return on investment also led some companies to allocate a lower budget for the forthcoming financial year.
Bellwether survey data for the final quarter of 2025 points to renewed pessimism among panellists regarding their individual company prospects and a more downbeat outlook at the broader industry level. 41.1% of firms were pessimistic towards industry-wide financial prospects, compared to only 11.0% that were optimistic. This resulted in a net balance reading of -30.1% (-24.0% in Q3), the lowest in three quarters.
As for adspend, a projected rise of 1.5% is forecast for 2026, up from earlier estimates of 1.2%. The adspend growth rate is forecast to hold steady at 2.3% from 2027 onwards, reflecting tailwinds from more supportive economic conditions.
Paul Bainsfair, IPA Director General, commented: “This quarter’s flatlining of marketing spend reflects a wider confidence problem. Global instability continues to unsettle markets, while domestically there appears to be limited faith in the Government’s grip on the economy. Until that changes, caution is understandable.
“What we can say with confidence, however, is that those organisations which continue to invest in advertising, especially in a quieter market, stand to gain greater visibility and, over time, increased market share. This is most effective when investment is sustained and focused on long-term brand-building channels.”
Maryam Baluch, Economist at S&P Global Market Intelligence and author of the Bellwether Report, said: “2025 closed on neutral footing, with marketing budgets holding firm throughout the quarter as businesses exercised caution around major events such as the Autumn Budget. As we move into 2026, the economic climate remains challenging, with marketeers under pressure to deliver ROI as firms scrutinise spending decisions more harshly given the competitive market landscape and subdued macroeconomic outlook.
“That said, budgetary stasis points to some resilience, with cutbacks avoided. An anticipated easing of inflationary pressures and reduced borrowing costs in 2026 could spring business investment back to life this year.”
Amy Lawrence, Head of Digital, EMEA, Publicis Imagine & Chair of the IPA Digital Marketing Group, added: “There have been significant changes in the main media budget forecasts since the previous Bellwether report. Whilst the overall outlook shows a slight decline, there are notable swings within channels, most prominently Video (from +6.7% to -5.1%) and Other Online (from +2.1% to +13.2%). Although caution is required when interpreting these broad categories, the sharp increase in Other Online spend points to a wider shift towards performance-focused investment and short-term ROI amid ongoing economic uncertainty. With potential rate cuts on the horizon, a degree of rebalancing may emerge in the next wave of results.”
