Total marketing budgets were unchanged in the final quarter of last year, the IPA Bellwether Q4 2025 survey data showed.
Following two consecutive quarters of upward revisions to total marketing budgets, the year ended on a neutral note, with the net balance registering at 0.0% (down from +3.6% in Q3).
Uncertainty and headwinds
Economic and political uncertainties were headwinds to marketing expenditure growth, prompting surveyed executives to wait on the sidelines during the final three months of the year.
The majority of Bellwether respondents (57.4%) left their marketing budgets unchanged over the course of the quarter. The remaining panellists were evenly split, between those reporting an increase and the those implementing cuts.
According to anecdotal evidence, cost pressures, muted economic activity, budget constraints led to a re-evaluation of marketing budget allocations.
Additionally, the Autumn Budget was noted as a headwind in the final quarter. Where budgets were expanded, however, businesses sought to strengthen their online presence and reach wider audiences.
Increased competition and challenging market conditions also drove firms to diversify their marketing channels and boost spend to maintain a competitive edge.
PR and Events
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
Main media and sales promotions budgets both recorded no change to their budgets in the final quarter of 2025.
A detailed breakdown of the main media category painted a distinctly downward-skewed picture in Q4, with four out of the five tracked sub-components registering reductions in spending.
Out of Home
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
Audio emerged as the second-worst performer, with a net balance of -10.2% of panellists reporting a decrease (an improvement from -13.0% in the previous quarter, however).
Published brands & Video
Published brands and video also saw reductions, with net balances shifting from -6.2% and 6.7% in Q3 to -6.5% and -5.0% in Q4, respectively.
Other online was the only sub-component to record a rise in budgets in Q4, with the net balance rising notably from +2.1% to +13.2%
The remaining three areas, namely market research, direct marketing and other, all recorded reductions to marketing budgets in the closing quarter of 2025.
The net balance came in at -4.0%, -4.3% and -12.8%, from -6.8%, +9.7% and -12.1% in the quarter prior, respectively.
And the ‘Other’ category recorded the steepest decline in marketing spend, meanwhile direct marketing recorded a fresh fall.
The UK’s economic outlook for 2026 has dimmed, with S&P Global Market Intelligence revising its GDP growth forecast from 1.1% to 0.8%.
The downward revision points to expectations of a more subdued performance. Moreover, anticipated sluggishness stems from lacklustre consumer spending, while persistent global trade uncertainties and heightened geopolitical tensions are set to dampen growth and erode business confidence and investment.
Nevertheless, expectations of multiple Bank of England rate cuts in 2026 could offer additional relief to households and businesses. Consumer spending is to strengthen modestly by the end of 2026, in line with slowing but continued growth in real incomes, lower inflation and retreating borrowing costs.
In turn, GDP growth is forecast to rebound in 2027.
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, said: “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, S&P Global Market Intelligence, 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.”