UK Marketing Budgets Flat in Q4 2025: IPA Bellwether Report

After two quarters of cautious optimism, UK marketing budgets slammed into a wall in the final three months of 2025. The net balance of companies increasing their spend hit exactly 0.0%, down from a healthy +3.6% in Q3. This isn’t a rounding error. It is a signal fire.

For the first time in a year, the growth engine of the British creative economy has stalled.

But the headline number hides a more fractured reality. While finance directors froze the total pot, they didn't stop spending—they just panicked. Money is fleeing from long-term brand equity and pouring into the immediate dopamine hit of performance marketing.

The IPA Bellwether Report, released today, paints a picture of a sector paralyzed by macro-political fear and an obsession with short-term returns.

The era of "growth at all costs" is dead. Welcome to the era of "prove it or lose it."

The Anatomy of a Freeze

To understand the severity of this quarter, you have to look at the winners and losers. They tell a story of risk aversion.

"Other Online" marketing—a category dominated by search, social, and performance channels—surged with a net balance of +13.2%. This is where the panic money goes. It’s trackable. It’s immediate. It fits neatly into a CFO’s spreadsheet.

Contrast that with Main Media advertising (TV, radio, cinema), which flatlined at 0.0%. The specifics are even grimmer. Out-of-Home (OOH) advertising collapsed, registering a net balance of -17.6%. Audio advertising fell by -10.2%.

The message from the boardroom is clear: If we can’t click it, we won’t buy it.

"This quarter's flatlining of marketing spend reflects a wider confidence problem," says Paul Bainsfair, Director General of the Institute of Practitioners in Advertising (IPA).

"Global instability continues to unsettle markets, while domestically there appears to be limited faith in the Government's grip on the economy."

Bainsfair’s critique cuts deep. A 0.0% balance doesn't mean nothing happened. It means for every company brave enough to invest, another retreated into its shell. 57.4% of surveyed companies left their budgets completely unchanged.

They are waiting for a shoe to drop—be it US tariffs, inflation aftershocks, or political volatility.

The Performance Trap

The data reveals a dangerous pivot.

While "Other Online" boomed, Events spending—the darling of the post-pandemic recovery—saw its growth rate decapitated. In Q3, Events boasted a massive +10.9% net balance growth.

In Q4, that withered to just +1.4%. The face-to-face premium is evaporating as companies slash travel and hosting costs.

Public Relations (PR) managed to scrape a win, rising from +2.5% to +3.5%. In a crisis, you don't buy ads; you buy spin. Companies are seemingly investing in reputation management over market expansion.

But the real casualty is Market Research, which fell by -4.0%. This is the most damning metric of all. When companies stop researching, they stop listening.

They are flying blind, executing tactical spends without the strategic radar to know if they are hitting the target.

Maryam Baluch, Economist at S&P Global Market Intelligence, calls this "budgetary stasis." She notes that while cutbacks were avoided, the "subdued macroeconomic outlook" has forced marketers to justify every penny.

The Contrarian Take: The Crisis Isn't Q4. It's 2026.

While the industry obsessively dissects the Q4 flatline, they are missing the gun pointed at their heads for the next fiscal year.

The most terrifying number in the ExchangeWire analysis of the report isn't the 0.0% current balance. It is the +1.7% preliminary outlook for 2026/27.

This is the weakest preliminary budget setting in the Bellwether’s 25-year history, barring the chaotic crash of the pandemic and the 2008 financial crisis.

Historically, preliminary budgets are optimistic. Marketers dream big in January and get cut down by June. If they are starting at a barely-positive +1.7%, the actual spend for the next financial year is almost guaranteed to be negative once inflation is factored in.

We are not looking at a pause. We are looking at a secular contraction.

The "Other Online" surge (+13.2%) suggests a structural decoupling. Brands aren't just pausing TV ads to wait for better rates. They are abandoning the upper funnel entirely. They are trading the durability of brand awareness for the cheap sugar rush of conversion.

In 18 months, when customer acquisition costs (CAC) on digital platforms skyrocket due to saturation, these brands will have no organic demand to fall back on. They are eating their seed corn to survive the winter.

The Bottom Line

A flat quarter is often dismissed as a "correction." But when you combine a -17.6% drop in outdoor advertising with a near-zero growth forecast for the coming year, you get a clear picture of corporate psychology in 2026.

Fear has returned.

Companies are hoarding cash, deferring big bets, and demanding immediate ROI. The bold visionaries are being silenced by the bean counters.

"Those organisations which continue to invest in advertising, especially in a quieter market, stand to gain greater visibility," Bainsfair argues. He is right, historically speaking. The brands that spent through the 2008 recession emerged as market leaders in 2010.

But history is written by the survivors. For the UK marketing sector, 2026 is shaping up to be a year of survival, not invention. The budget flatline isn't a pause button. It's a ceiling.