Industry Optimistic for 2025 After Bellwether Report Reveals Budget Growth
The Q4 2024 IPA Bellwether Report paints a cautiously optimistic picture of the UK marketing landscape, as businesses navigate a complex mix of economic challenges and emerging opportunities. After a pause in budget growth during Q3, the final quarter of 2024 saw a modest resurgence, with marketing budgets increasing by a net balance of +1.9%. This marks 14 positive quarters out of the past 15, reflecting the sector's resilience amid ongoing pressures.
Paul Bainsfair, IPA Director General, encapsulates the mood: "Given the significant economic and geopolitical challenges that UK companies are facing, this latest Bellwether Report paints an understandably cautious picture. However, it is encouraging to see that, despite these headwinds, UK companies are increasing their overall marketing budgets."
At the heart of this resilience is a strategic pivot toward more targeted and adaptable marketing channels. Direct marketing continued its impressive streak, buoyed by advancements in AI that enable hyper-personalized campaigns. While growth in this segment slowed slightly to +5.6% in Q4, projections for 2025/26 remain strong, with a net balance of +15.6% expecting increased investment.
Similarly, events marketing emerged as a star performer, with a net balance of +12.3% in Q4 reflecting businesses’ renewed commitment to face-to-face engagement. This momentum is expected to carry forward into 2025/26, as preliminary data reveals robust optimism for increased spending in this category.
Conversely, main media advertising faced significant headwinds, with a net balance of -4.3% indicating a contraction in Q4. Subcategories like video and audio saw particularly sharp declines, highlighting the cautious approach many companies are adopting toward traditional mass media. These shifts underscore broader concerns about profitability and the impact of policy changes, such as increased National Insurance contributions and minimum wage adjustments.
Despite these challenges, there is a sense of guarded optimism. Preliminary budget plans for 2025/26 suggest a net balance of +25.6% of businesses anticipate increasing their marketing expenditure. This forward-looking confidence is bolstered by expectations of technological advancements, the potential for efficiency gains, and opportunities in emerging markets, particularly the Middle East.
However, uncertainty remains a significant factor as firms contend with persistent inflation, high interest rates, and geopolitical instability, including potential global trade disruptions following recent US tariff announcements. While these pressures weigh on consumer confidence and discretionary spending, they also drive innovation, pushing companies to explore new ways to deliver value and efficiency.
As the industry moves into Q1 2025, the landscape is defined by cautious hope. Businesses are balancing immediate challenges with long-term opportunities, leveraging technology and strategic investments to navigate an increasingly complex environment. In the coming pages, perspectives from industry insiders will delve deeper into how these dynamics are shaping advertising strategies and what lies ahead for the sector.
Industry leaders generally anticipate an uplift across the UK marketing landscape, with plans to adapt strategically and more of a focus on omnichannels and in-person experiences. Despite economic pressures, agencies are leaning into innovation, leveraging data, technology, and creativity to sustain growth, build loyalty, and deliver meaningful, long-term value.
Click here to read the full report.
Karla Smith, chief financial officer at Ogilvy UK
UK businesses are preparing for the pinch of the impending Employers NIC, so it’s great to see overall growth and cautious optimism in marketing spend. We continue to see diversification of spend, which is to be expected with continued personalisation. Perhaps it is time for some new categories to be added into this Bellwether though - where is Social, what about Influence? It is these growing specialisms within our portfolios that are attracting the marketing budgets with opportunities for innovation and new forms of content.
Simon Buchanan, CEO at McCann Manchester
It is always encouraging to read the words growth and the latest report suggests a more positive trajectory for marketing budgets in 2025. Marketeers are inherently optimistic, however over the last few years we have become accustomed to uncertainty.
Our key priority remains as always to support clients through somewhat challenging times. As we make headway in 2025 our focus is on innovation, to help build for the future, for our teams and partners, ensuring we continue to deliver first class effective creative solutions.
Our mission to build enduring brands has never been more important and is a relevant today as it was 100 years ago as our clients look to sustain their business value.
Richard Exon, founder at Joint
Come on Labour, we've got high hopes for you still but my goodness you need to put some wind in the sails quickly.
Today's IPA Bellwether report perfectly reflects an understandable sense of immediate business caution married with a dose of optimism for the future.
Given the rock solid historical data demonstrating how companies that maintain advertising spend in tough times benefit disproportionately, what better time for confident advertisers to demonstrate leadership?
To do anything else is to risk talking ourselves into recession
Joann DeLanoy, managing director at Toaster EMEA
It’s heartening to see brands incorporating more human connection during the age of AI, as we’re seeing with more in person events. The direct to consumer path is certainly the shortest and often most quantifiable ROI. However we must remember the substance behind these touch points is more important than ever, so investing in a brand, tone of voice and meaningful content to feature should not be overlooked as key parts of the experience. Building trust through transparency and depth will keep customers for the long term.
Tom Stone, co-founder at re:act
The report highlights an important trend: the ongoing shift towards social media as a key advertising channel.
Social media offers unparalleled targeting capabilities and the ability to deliver concise, impactful messaging. For businesses navigating today’s economic pressures, these advantages are hard to ignore. We’re seeing more clients adopt flexible strategies, integrating social as a central element of their marketing mix.
As optimism builds for 2024, this report reaffirms the value of social platforms in connecting with audiences and driving measurable outcomes. The message is clear: social media isn’t just an add-on, it’s where brands can truly adapt, innovate, and thrive.
Louisa O’Connor, managing director at Seen Presents
As a brand experience agency, events are our bread and butter, so it was encouraging to see the channel emerge as a top-performer in Q4 last year. Although large marketing expos (CES, Cannes Lions, Possible) continued to dominate the global events calendar—attracting new brands and prompting existing ones to expand their presence — my feeling is it’s the more nuanced local market events that still need focus.
Last year, we saw a few UK-based events get pulled at the last minute, from Upfronts to product launches, in favour of reallocating budgets to OOH or digital campaigns.
That being said, we’re currently experiencing our busiest January to date. Combined with the encouraging data from the recent Bellwether Report, this gives me hope that brands will continue to recognise the unique value events can offer compared to traditional marketing channels.
Patrick Reid, CEO at Imagination
The final quarter of 2024 brought a rare dip in advertising and marketing budgets - a pause after years of growth. As we move into 2025, the trajectory is back on the rise. Through the ups and downs, including the current macro uncertainty, one thing has remained constant: the events industry has seen consistent budget increases every quarter since 2022.
The takeaway? Brands are doubling down on delivering smart unique experiences. They recognise that experiences aren’t just impactful in the moment - they’re a proven path to building long-term loyalty and driving sustainable growth.
As we look ahead, events will continue to be a driving force, shaping the way brands connect with their audiences and delivering attractive and measurable returns. Experiences are more than a trend - they’re the cornerstone of meaningful brand growth.
Tom White, chief strategy officer at Modern Citizens
This quarter’s IPA Bellwether Report really captures the uncertainty we’re all feeling right now – a blend of caution, uncertainty, and a dash of hope. Rachel Reeves’ October Budget didn’t exactly set pulses racing, and with Trump’s inauguration just around the corner, there’s growing concern about a more challenging tariff environment for UK businesses. It’s no wonder we’re seeing a cautious approach all round.
The squeeze on consumer spending percolates through all of this. With inflation predicted to climb to 2.75% by the second half of next year before it starts to ease, the pressure isn’t going anywhere anytime soon. It’s a tough backdrop, no doubt about it.
But here’s an interesting shift: direct marketing is on the rise. In the past, this might have screamed “panic mode,” but from what I’m hearing, that’s not the case this time. Instead, there’s a buzz about what generative AI can do for personalisation. It feels less like a retreat and more like marketers leaning into new opportunities.
The drop in ‘main advertising’ spend, though, is a bit of a worry. We all know that brands investing in long-term growth tend to come out stronger. Let’s hope the forecasted bounce-back in 2025/26 comes good, because resilience always favours the brave.
Amy Garrett, UK president at Weber Shandwick
The recent Bellwether report reveals a glimmer of hope for us in the communications industry. We're witnessing a resurgence in marketing budgets, with a significant shift towards events and PR, rather than traditional media advertising. This suggests that we're all aiming to establish more personal connections with consumers. As we move forward, let's concentrate our efforts on innovative, cost-effective strategies such as PR that truly engage our audiences. It's also crucial to stay informed about government policies that could affect our approach. During these times of cautious growth, our adaptability and balanced approach will be our guide.
Jim Rudall, head of EMEA at Intuit Mailchimp
It is encouraging to see renewed marketing budget growth across the UK in Q4, perhaps indicative of just how important it was for marketers to capitalise on the quarter as a holiday shopping period. The Black Friday Cyber Monday (BFCM) weekend was popular for marketing efforts across UK businesses, particularly around audience engagement strategies. Our data revealed that London led the UK in email send volume during the Cyber Weekend - followed by Stockport, Manchester, Leeds, and Liverpool.
Also of note is the rise in investment towards Direct marketing, likely driven in part by AI’s ability to enable hyper-personalisation. It has never been more important to deliver a personalised message in order to stand out amongst the competition, and AI certainly has a role to play in unlocking this at scale. Our recent report revealed marketers are no strangers to automation, with 85% of marketers already integrating, or planning to integrate, AI tools into their operation.
Personalised messaging can also be optimised with channels such as SMS, which offers unparalleled immediacy. Top marketers differentiate themselves by integrating email with SMS to ensure consistent, multichannel engagement with customers. Looking ahead, the marketers who harness tools such as AI and SMS will be best positioned to drive engagement and unlock maximum ROI on their marketing spend.
Chris Falconer, group managing director at McCann Central
We closed out 2024 on a high. The final quarter brought a surge in new business, keeping us pitching right up until Christmas Eve. With continued growth across our services and specialisms helping us to end the year strongly, we once again showcased the versatility and resilience that define who we are.
Now, as we move further into 2025, we’re ready to harness that momentum and take on the opportunities and challenges ahead. It’s time to double down on our strengths – creativity, courage, and a drive for innovation. It’s a chance to amplify the value we deliver to clients, producing work that’s not only creatively brilliant but also impactful and enduring. So, we step into the new year with optimism, energy, and a clear focus, and are excited for what’s to come.
Chris Ambidge, commercial director at Collaborate
While 2025 looks like a year of uncertainty, it’s not all doom and gloom.
Bellwether’s indication of increased marketing spend is promising, and it’s not surprising that investment in events and activations is peaking. We’re living in a complex time, pushing people outside of their usual comfort zones. Smart brands are successfully leaning into that, aiming to be engaging, useful or entertaining.
Top of brands’ agenda is helping people connect with magical, shared moments of joy. We’re living the human economy – the potential of live activations is stronger than ever, with trusted, relevant brand experiences paying dividends.
Charlie Griffith, managing director at UNBOUND
While marketing budgets are cautiously returning, the tepid post-budget increase reveals a lingering and obvious hesitancy. Smart brands, however, aren't standing still; they're wisely investing in tangible connections through the likes of events and retail. Real world stuff that to put it simply, converts. This shift validates our independent agency’s core belief: agile and targeted strategies, not broad, expensive campaigns, deliver the strongest ROI. Us smaller shops are built for this environment, offering the experience, speed and precision larger agencies simply can't match.
Chris Thurling, chairman at Armadillo
While the rise in direct marketing spend – including CRM – is good news for agencies like Armadillo, we're concerned about reduced investment in long-term brand-building through main media advertising. During challenging times, brands understandably come under pressure to focus on short-term performance, with paid media an easy target for cost reduction. However, cannibalising budgets this way is misguided. Our experience shows that CRM performs best when supporting strong brands. We believe that CRM channels – such as email, push and app content – can bear more of the load, using personalised, data-driven strategies to maintain and extend brand reach while continuing to drive short-term performance.
Dave Jones, head of strategy at true
Whilst the numbers suggest a lot of underlying nervousness, marketers should be leaning into the challenge of achieving more with less - particularly when it comes to digital. There is still a lot of waste in the way brands deliver customer experiences online, with many opportunities to streamline tools and processes without compromising on the quality of a brand’s vision or a customer’s experience. Just in the last year, we’ve worked with clients to roll out new models for conducting high quality user research, personalising experiences and creating and managing content that are cheaper and faster.
Tommy Smith, managing director at McCann London
The Q4 Report reflects a nuanced picture of the UK marketing landscape, shaped by both macroeconomic influences and industry-specific dynamics. Fortunately, even with some of the anticipated headwinds cited we are seeing positive sentiment amongst our key clients for 2025/26 budget planning, which highlights resilience and optimism in continuing to leverage and invest in marketing as a tool for competitive differentiation. And even with our dear friend ‘main media advertising’ facing some temporary constraints, we’ve seen a positive uplift in clients engaging with us via our AI powered creative accelerator ‘Atomic Soup’ – helping them and us find deeper and more meaningful truths than ever before. This rings true to the trends in this report highlighting the importance of embracing change and leveraging insights to deliver real impact.
Matt Lewis, president Europe at Momentum Worldwide
Sustained growth in the events sector is encouraging, but not surprising. As the lines continue to blur online, in terms of what is real, the power of human connection with customers emerge. Events are becoming more integrated into overall brand building and serve as a catalyst for content, rather than a standalone moment. Demand and attendance for live experiences continues to rise, and brands are harnessing the power of these engaged audiences.
Callum Gill, head of strategy at Rehab
As encouraging as the Bellwether Report’s message of growth is, there’s a clear dissonance between these forecasts and the reality agencies face. Consumer reluctance to spend, driven by the cost-of-living crisis, remains the dominant force shaping purchasing decisions. It’s interesting, however, to see growth in direct and event marketing—tactics far removed from the ongoing AI and digital focus – highlighting a need for marketers to adopt a more holistic strategy. This year will be a battleground for brand loyalty, with years of neglect creating a more fickle consumer base. The report’s emphasis on personalization is spot on – it’s essential to winning trust.
