Despite marketing budgets stagnating in the golden quarter, adspend is still forecast to rise in 2026, the latest IPA Bellwether reveals.
Cost pressures, muted economic activity and budget constraints have seen UK marketing budgets flatline in Q4 2025, according to the latest IPA Bellwether report.
Following two consecutive quarters of upward revisions to total marketing budgets, 2025 ended on a neutral note, with net balancing coming in at 0% – down from 3.6% in Q3.
Usually dubbed the golden quarter, with Christmas, Black Friday and Prime Day Q4 is often a peak time for sales for brands.
In addition to turbulent economic conditions, respondents noted the Autumn Budget, escalating geopolitical tensions, global and domestic policy uncertainty, US tariffs and fears of an “AI-fuelled stock market bubble”, were other compounding factors leading to budgets flatlining.
Events and PR were the only two of the seven categories monitored that showed a rise in marketing budgets. The net balance for PR quarter-on-quarter (QoQ) went from 2.5% to 3.5%; while events fell steeply from 10.9% to 1.4%.
All other categories saw net balance in the negative for spending. The most significant decline was seen in out-of-home (OOH), which fell to -17.6% from -15.2%.
Audio came in next reporting a net balance of -10.2%, although this is up from the previous quarter where the figure stood at -13%. Published brands and video also saw reductions in spending budgets, going from -6.2% and 6.7% in Q3 to -.5% and -5% in Q4, respectively.
Other online was the only sub-component to see a rise in budgets in Q4, going from 2.1% to 13.2% QoQ.
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.”
Adspend forecast to rise despite economic uncertainty
Marketers have predicted a 1.7% increase in total adspend for the 2026/27 financial year, which is the weakest preliminary forecast in Bellwether survey history.
According to the report, respondents pointed to challenges in getting greater discretionary budgets during uncertain economic times as well as pressure to bring in greater return on investment as the reasons.
This mirrors S&P Global Market Intelligence’s revised forecast, which paints a rather sluggish economic outlook for the UK in 2026. The company revised its GDP growth forecast down to 0.8% from 1%, pointing towards a more subdued performance.
This downward revision comes from limited consumer spending, persistent global trade uncertainties and heightened geopolitical tensions, which could erode business confidence and investment.
Despite this, adspend is projected to rise by 1.5% for 2026, up from earlier forecasts of 1.2%, according to the report. It is then predicted to hold steady at 2.3% from 2027 onwards.
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.”
Jim Kelly, deputy managing director, head of planning, story and IPA Chair for Scotland, added: “[…] There’s no hiding from this being one of the weakest preliminary outlooks in Bellwether history, with no growth anticipated in main media advertising.
“Perhaps that’s no surprise given the continued lack of confidence among both businesses and consumers, combined with cost-of-living pressures. It’s imperative for agencies and their clients to keep building the case for continued marketing investment and the benefits that this delivers, to give those green shoots any chance of pushing through.”
