This week’s IPA Bellwether Report suggests the marketing and advertising industry has been pulled firmly into the current economic turbulence.
Even direct marketing – long treated as a recession-busting safe haven – has felt the squeeze, as global political noise, fresh tariff threats from Donald Trump, and a relentlessly pessimistic British news cycle combine to keep confidence on edge ahead of Chancellor Rachel Reeves’ Autumn Budget.
A hint of light, but no clear runway yet
The report’s authors point to the possibility of better news down the line, with interest rates expected to fall and inflation appearing to come under control.
But the question hanging in the air is simple: what does the situation look like for people making decisions “at the coalface”?
Decision Marketing has put that question to senior industry voices, and the answers paint a picture of caution, recalibration, and a growing tug-of-war between measurable performance and long-term brand strength.
The CIM view: uncertainty drives belt-tightening – and risk
The chief executive of the Chartered Institute of Marketing argued that the outlook for UK marketing budgets remains uncertain, with economic headwinds still chipping away at businesses.
Ongoing price pressures in key categories, continued cost challenges, and mixed consumer confidence are leaving many organisations unsure about future sales – and therefore hesitant about investment in staff and marketing.
In that environment, it is little surprise that brands are tightening budgets and leaning towards activity that can be measured cleanly, quickly, and defensibly. The concern, however, is that caution can quietly turn into retreat: broader brand building is delayed or scaled back, and the long-term consequences can be missed in the short-term dashboards.
The CIM perspective is that the brands best placed to navigate uncertainty will be those with strong marketing capability – staying flexible, disciplined, and insight-led, focusing spend where it drives both immediate results and long-term differentiation.
Performance pulls harder as ROI becomes the language everyone speaks
From Innovid’s EMEA managing director came a blunt assessment: it is no surprise that advertisers are doubling down on performance marketing. With so many channels available – and Artificial Intelligence increasingly enabling strategies to be built and activated across digital platforms – the centre of gravity has shifted firmly towards ROI.
The Bellwether findings, in this view, reinforce a broader trend: overall budgets may only grow modestly, main media is expected to decline, and performance-driven channels continue to gain traction.
The implication is not merely that brands are “spending less”, but that they are demanding more proof from every pound – and that having the right tools to optimise performance across channels is becoming less of a nice-to-have and more of a survival requirement.
B2B in Q4: fewer big leaps, more investment where momentum exists
The Fox Agency’s managing director for UK and Europe described Q4 2025 as a period of noticeable behavioural change.
B2B brands, they suggested, remained cautious around large, net-new decisions. Yet where organisations already had established strategies that were working, there was a greater willingness to continue investing – particularly in areas where momentum and evidence already existed.
Their wider argument is that B2B marketers can turn complexity into advantage, especially in growth verticals such as Industry 4.0, SaaS, Automotive and Connectivity. AI, in particular, was framed as a lever for hyper-personalisation and for spotting unmet or emerging needs at scale.
But the role of marketing, in this telling, is not just to optimise; it is to simplify. Brands that show up earlier in the sales journey with genuinely helpful, relevant value build both short-term growth and long-term trust – and those that pursue both relentlessly will not merely keep up, but lead.
“Cautious optimism” and the rise of efficiency-led decision making
Engage’s director read the Bellwether mood as cautiously optimistic, arguing that marketers are not abandoning investment so much as pausing, reassessing, and prioritising what can add the most impact and value.
The expectation of a gradual recovery suggests budgets may begin to loosen later in the year – particularly for activity that can clearly demonstrate its worth.
This is also where the “efficiency stack” is becoming central: performance marketing, first-party data activation, and AI-powered optimisation are increasingly shaping the mix. AI testing, too, is likely influencing how brands allocate spend, nudging decision-makers towards what can be iterated quickly and measured clearly.
The AI double-edge: opportunity, threat, and the “black box” problem
Outra’s chief revenue officer highlighted a tension that many marketers recognise instantly: AI is both a major opportunity and a potential threat, and that duality is shaping strategy. Flat budgets reflect the pressure of costs, muted economic activity, and tighter constraints – all of which force brands to scrutinise where marketing can deliver the greatest impact.
While early signs point only to shallow expansion in the coming financial year, the response is becoming more precise: smarter targeting and more data-led approaches designed to squeeze maximum return from limited headroom. Yet there is a caution here too. AI and emerging technologies can sometimes behave like a “black box”, offering scale and speed but with returns that are less predictable.
In a tight environment, that unpredictability increases the importance of careful planning, clear insight, and the agility to adapt quickly as conditions shift.
Research budgets slide – and synthetic data steps forward
From Kantar Media TGI’s managing director for UK & Europe came a separate, striking signal: market research budgets are falling, changing how brands seek to understand audiences.
The argument was not that understanding people is becoming less important, but that the method is evolving – a balancing act between established research approaches and AI-enabled models informed by synthetic data.
The warning, however, is that speed and cost are only part of the story. Consumer behaviour can become “trickier” precisely when uncertainty rises – and that is often where AI has the hardest job replicating reality.
Synthetic data is only ever as strong as the underlying source data, and the human element remains vital. Even if costs and scale improve, brands still need to understand what real people think in order to reach and target them effectively.
A strategist’s warning: efficiency can hollow out distinctiveness
The founder and strategy partner at BigSmall offered the sharpest cautionary note. After a brief flicker of confidence earlier in the year, they argued, uncertainty has returned: political noise, economic fragility and cost pressures are pushing brands back into wait-and-see mode.
The outcome is telling: short-term online spend edges up, while brand-building channels, research and main media are “quietly hollowed out”.
That may feel prudent, but the warning is that it can be a dangerous trade. When everyone chases efficiency, distinctiveness fades – and freezing investment does not protect brands in choppy markets so much as weaken them.
The brands that tend to emerge stronger, in this view, are not the ones that paused, but those that doubled down on clarity, creativity, and long-term value. Bellwether shows an industry bracing for impact; the smarter response is to move, not freeze.
The trust factor: why channel choice matters more than ever
Marketreach’s commercial director delivered the final word, framing the latest Bellwether as cautious spend in Q4 2025 – but also as an opportunity to refocus on what delivers the greatest value.
In uncertain times, they argued, trust becomes paramount. Political uncertainty, fragile public services, ongoing cost-of-living challenges, and the rise of AI-generated content have left the public warier, increasingly trying to work out who and what to believe.
Trust, however, is not a soft metric. Marketreach highlighted that 74% of consumers are willing to spend more with a brand they trust, and that 42% of consumers’ trust in an organisation is shaped by the medium used to contact them.
In that context, “highly trusted” and personal channels can reinforce campaigns both in the short term and long term – with Marketreach, as champions of direct mail, positioning it as the single most trusted channel for strengthening relationships and improving overall campaign impact even during uncertainty.
Conclusion: tightening budgets, sharper choices, and a battle for the long term
The Q4 2025 Bellwether picture is one of restraint rather than collapse: budgets tightening, confidence wobbling, and decision-makers gravitating towards what can be measured, optimised, and justified.
Performance-led activity, first-party data, and AI-powered tooling are rising in importance – while main media, brand-building investment and research face renewed pressure. Yet the most consistent message from industry leaders is that caution has consequences.
The brands best placed for recovery will be those that stay agile, invest strategically, protect distinctiveness, and build trust through both what they say and how they choose to say it.
