IPA Bellwether Shows Post-Autumn Optimism but Caution Around Media Spend

Dan Meier 16 January, 2025 

UK marketing budgets returned to growth in the final three months of last year, according to the latest IPA Bellwether report, following a freeze in budgets in Q3. The pause in spend was reportedly caused by uncertainty around the Autumn Budget, but the latest survey reflects renewed optimism at the tail end of 2024.

An average 1.9 percent of UK marketers (based on subtracting the proportion who reported a decrease in spend from those whose budgets increased) started releasing the valve on their marketing spend after the Autumn Budget. However, the 1.9 percent net balance marks the second-lowest figure recorded since the start of 2021, suggesting ongoing caution towards ad spend in the UK.

There was particular caution around main media budgets, with video recording a rare fall of -10.7 percent. This follows a +11.7 percent increase in Q3 so one might expect video budgets to come down, but based on previous revisions this represents an unusually steep drop.

Amy Lawrence, Digital Partner, UK & Global, EssenceMediacom & Chair of the IPA Digital Marketing Group, called the contraction in video spend a “relatively new trend” for a channel that has recorded consistent budget increases over the past few years.

And a similar story emerged across other media channels, including audio (-17.4 percent), Out of Home (-12.8 percent) and published brands (-10.2 percent). Paul Bainsfair, Director General of the IPA, said the results for main media budgets were disappointing but not entirely unexpected.

“It’s disappointing to see reductions in main media budgets, which remain the most effective channel for sustaining and growing brands in the long term,” he commented. “Cuts to this category are not uncommon in tougher times given their need for greater financial contribution, which is also why we’ll often see concurrent increases by marketers to other shorter-term media. All of which reflects companies’ concerns on profitability following the Budget.”

Media on track to bounce back 

On the plus side, the total drop in main media (-4.3 percent) was offset by growth in events budgets (+12.3 percent), PR (+6.8 percent), direct marketing (+5.6 percent), sales promotions (+4.1 percent) and market research (+3.1 percent). And the outlook for the year ahead looks positive, according to the IPA, with a net balance of +25.6 percent of companies anticipating increased marketing budgets in the 2025/26 financial year.

Preliminary data for the year ahead suggests spending will increase for all seven monitored categories, with direct marketing set for the strongest growth (+15.6 percent), followed by events (+15.5 percent) and PR (+8.3 percent).

And main media budgets are also on track to return to growth at +6.3 percent, according to the report. Gill Jarvie, Client Services Director, Republic of Media and IPA Chair for Scotland, noted that while the outlook for media budgets is positive, the uplift is “conservative” compared to the overall boost in marketing budgets.

There was also downbeat sentiment towards overall business outlook, with marketers recording -1.2 percent pessimistic outlook for their companies’ prospects. Meanwhile -20.1 percent foresaw deterioration in financial prospects for the industry as a whole, representing the highest degree of pessimism since Q4 2022.

Helen Blakley, Managing Director, Genesis and IPA Chair for Northern Ireland, cited the incoming legislation around ads for foods high in fat, salt, or sugar (HFSS) as further cause for uncertainty this year.

“We are still to understand the intricacies on the latter as the ASA/CAP work through the implementation guidance, but going live from October 2025, this will be a key area to navigate for the Food & Drink sector and clients,” she said. “Thankfully, problem solving is a core strength of our sector, so we will work in partnership with our clients to navigate what lies ahead and may affect the latter half of 2025 activities in this area.”

Investing in the future

Despite this uncertainty, alongside headwinds caused by US import tariffs and higher labour taxes coming in April, the forecast for UK ad spend looks brighter in the next few years. According to S&P Global Market Intelligence, ad spend will increase by 1.3 percent in 2025, 1.8 percent in 2026, and 2 percent in 2027 and 2028.

And the rise of AI is also expected to boost marketing efficiencies and drive personalisation in the year ahead. Paul Baynsfair commented that AI’s ability to enable “hyper-personalisation” will help fuel investments, particularly in direct marketing.

“Looking ahead, it’s promising that both UK companies’ provisional budget plans for 2025/26 and S&P Global’s ad spend forecasts are trending upward,” he said. “Advertising remains a vital tool for brand growth, economic development, fostering competition, and driving innovation. As such, companies shouldn’t overlook the importance of sustained investment.”

“It is encouraging to see an anticipated increase, albeit a shallow one, to budgets for 2025 and whilst cautious, there is still a sense of optimism as we embark upon 2025,” added Helen Blakley.

Follow VideoWeek on Twitter and LinkedIn.

2025-01-16T12:05:19+01:00

About the Author:

Reporter at VideoWeek.
Go to Top