Observed Signal · Jan 14, 2026 · Market Research Release · Source: VideoWeek · Impact: 2/5 · Sentiment: Negative
UK Marketers Prioritize Performance Amid Budget Stasis
The IPA Bellwether report shows UK marketing budgets were flat in Q4 2025 (net balance 0.0%), marking a rare ‘budgetary stasis’ during the Golden Quarter. Budgets rose for PR (+3.5%), events (+1.4%), and other online (+13.2%), while main media budgets remained unchanged. Within main media, declines appeared in out-of-home (-17.6%), audio (-10.2%), and published brands (-6.5%), with video down -5.0% in Q4 after a +6.7% rise in Q3. Analysts note a shift toward performance-led investment and shorter ROI horizons, against a subdued macro backdrop including cost pressures and geopolitical tensions. Forecasts for 2026/27 show cautious growth, with UK ad spend expected to rise around 1.5% in 2026 and 2.3% in 2027, while the 2026/27 budgets survey indicates a net +1.7% increase in planned spend. Budget discipline is seen as essential to sustaining long-term brand-building alongside ROI-focused channels.
IPA Bellwether market spending insights indicate a cautious, performance-driven shift with mixed signals; industry impact is notable but not transformative.
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Key Takeaways & Evidence Grounding
- Q4 2025 marketing budgets net balance: 0.0% (flat).
- PR budgets +3.5%, events +1.4%, other online +13.2% in Q4 2025.
- Main media budgets unchanged on net balance: 0.0%; video -5.0% in Q4 2025 (after +6.7% in Q3).
- Out-of-home -17.6%, audio -10.2%, published brands -6.5% in Q4 2025.
- S&P Global Market Intelligence revised UK GDP growth to 0.8% (from 1.1%); ad spend forecast up 1.5% in 2026 and 2.3% in 2027.
Connected Companies & Entities
2 Entities mappedRelated Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
UK Marketers Cautiously Boost Budgets Amid Economic Uncertainty
UK marketing budgets rose for the second straight quarter in Q3 2025 according to the IPA Bellwether Report, though growth slowed amid economic and political uncertainty ahead of the Autumn Budget. The net balance was +3.6%, down from +5.5% in Q2, with 22% of panellists reporting increases and 18.7% reporting reductions. Growth was driven by events and direct marketing, while main media budgets remained flat; video and online categories grew, but budgets for published brands, audio, and OOH declined, and sales promotions fell to -0.9% from +9.4%. The IPA kept its 2025 ad spend forecast at 0.6%, while 2026 forecasts were trimmed from 1.6% to 1.2%. The report emphasizes balancing immediate ROI with long-term brand building, as AI tools reshape research and targeting and push spend toward ABM, LinkedIn, Meta, earned media, and programmatic channels. Industry voices stress accountable measurement, stronger brand storytelling, and a continued shift toward omnichannel strategies into early 2026.
UK Marketing Budgets Flat in Q4 2025
The IPA Bellwether Report shows UK marketing budgets paused in Q4 2025 with a net balance of 0.0%, down from +3.6% in Q3. 57.4% of surveyed companies left budgets unchanged, with remaining respondents evenly split between increases and cuts. While PR and events saw modest gains, several traditional ad categories declined—out‑of‑home (-17.6%), audio (-10.2%), published brands (-6.5%) and video (-5.0%). Despite a Q4 video spend dip, digital video grew across 2025 (nearly one quarter of digital spend) and UK video sales rose ~8% year‑on‑year, driven by streaming, CTV and Smart TV home‑screen discovery. Contributors highlighted audio resilience, shifts toward measurable digital channels, increased emphasis on AI, first‑party data and clean‑room collaborations, and stronger demand for brand‑lift and ROI measurement as budgets become more scrutinised.
Global Brands Ditch Labour-Based Agency Fees, WFA Finds
A new report from the World Federation of Advertisers (WFA) and Agency Mania Solutions, titled 'How Brands Define, Scope and Reward Agency Work', reveals a significant shift in agency compensation models. Based on responses from 69 multinational companies with a combined marketing spend of $147 billion, the report finds that labour-based payment models, which were dominant in 2011, now represent the main compensation model for only 19% of global brands. Meanwhile, fixed-fee/output models have risen to 33%, and 'Labour + Performance' models to 21%. Performance-based fees show the strongest momentum, with 63% of multinationals expecting to increase their use, driven by AI, which is compressing labour hours. However, only 20% have evolved their commercial models in response to AI, though 61% intend to. The report also notes a shift in focus towards factors like briefing quality and trust over financial incentives.
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