Bellwether Reaction: 'Stay agile, prioritise targeting'

This week’s IPA Bellwether Report has revealed that, perhaps unsurprisingly, the marketing and advertising industry has been caught up in the economic turbulence, with even the recession-busting direct marketing sector being affected by a rampant Donald Trump, threatening ever more tariffs and a fear mongering British press, determined to give the Chancellor Rachel Reeves a rough ride ahead of the Autumn Budget.

The report authors suggest there could be better news ahead, as interest rates fall and inflation comes under control but what do those at the coalface see? Decision Marketing asks leading industry professionals for their take on the Q4 adspend report.

First up is Chartered Institute of Marketing chief executive Chris Daly, who said: “It’s clear that the outlook for the UK marketing budgets remains uncertain. Economic headwinds continue to chip away at UK businesses – from ongoing price pressures in key categories, to continued cost challenges and mixed consumer confidence. We’ve also seen business confidence weaken recently, with many companies still unsure about future sales and investment in both staff and marketing.

“Under these conditions, it’s understandable that brands are tightening their belts. That often shows up as a shift towards highly measurable, performance‑led activity, and delayed or scaled‑back spending on broader brand building.

“But taking a cautious approach does bring an element of risk. To navigate this period, organisations need strong marketing capability – staying flexible and disciplined, using data and insight to focus spend where it drives both short‑term results and long‑term differentiation. Those that invest in marketing capability, not just channels, will be better placed to respond to change and capitalise when confidence returns.”

For Innovid EMEA managing director Simon Thorne, however, it is little surprise that advertisers are doubling down on performance marketing. With so many channels available, and AI now enabling marketers to build and activate strategies seamlessly across digital platforms, the focus is firmly on ROI.

Thorne added: “The report only reinforces this trend. While overall marketing budgets are forecast to grow only modestly, main media is set to decline, whereas performance-driven channels continue to gain traction. This shift underlines the importance of adopting the right tools to optimise performance across all channels, not only to survive, but to thrive in a competitive landscape.’

Meanwhile, Fox Agency managing director of UK and Europe Rachel Lofthouse reckons market behaviour in Q4 2025 showed a noticeable shift: B2B brands remained cautious around large, net-new decisions, while organisations with established and proven strategies showed a readiness to continue investment in areas where momentum already exists.

Lofthouse continued: “B2B brand marketers must turn market complexity into advantage, particularly in growth verticals such as Industry 4.0, SaaS, Automotive and Connectivity. There’s a significant opportunity to leverage AI to unlock hyper-personalisation and spot unmet or emerging customer needs at scale. Marketing must play a role in simplifying market complexities, being present earlier in the sales journey to give buyers something helpful, that is right for them. The brands that are relentless in the pursuit of both short-term growth and long-term trust will not just keep up, they’ll lead.”

Even so, Engage director Dom Mernock believes the report’s cautious optimism is important. Marketers are not abandoning investment altogether, they are pausing, reassessing and prioritising where spend can add the most impact and value. The expectation of a gradual recovery suggests that budgets may begin to loosen later in the year, particularly for activity that can clearly demonstrate this value.

He commented: “We’re seeing spend move towards efficiency-led channels and technologies with performance marketing, first-party data activation and AI-powered optimisation becoming central and AI testing is also likely to be having an impact across the marketing mix.

“The report ultimately reinforces that the brands continuing to invest strategically during downturns are best placed to reap the rewards when confidence returns. For marketers who balance short-term performance with long-term brand building, this period can be a foundation for stronger growth when budgets recover.”

Over at Outra, chief revenue officer Graham Field, highlights that the Bellwether shows how the duality of AI being both an opportunity and a potential threat is shaping marketing strategy.

He added: “The flat marketing budgets reflect the impact of cost pressures, muted economic activity, and tighter budget constraints, all of which are forcing brands to take a closer look at where their marketing investments can deliver the greatest impact.

“Preliminary data for the upcoming financial year suggests only shallow expansion in budgets, meaning marketers are more focused on precise audience targeting and smarter, more data-led approaches to maximise return on spend.

“While AI and other emerging technologies offer exciting possibilities for engagement and personalisation, they can sometimes act as a ‘black box’, with less predictable returns. In a tighter budget environment, this makes careful planning and insight-driven decision-making more important than ever.

“Looking ahead, success will go to those who stay agile, prioritise highly targeted strategies, and adapt quickly to shifting marketing conditions.”

For Kantar Media TGI UK & Europe managing director Rachel Macey, the data continues a striking trend as market research budgets fall, signalling a shift in how brands seek to understand their audiences, adding that this is an evolution rather than a retreat as the industry seeks to balance established research capabilities with AI-enabled approaches informed by synthetic data.

Macey said: “While agility and cost are invaluable, that’s just one part of the story. The challenge remains to combine the credibility of robust research with the efficiency of new technologies, especially when consumer behaviour becomes trickier for AI to replicate accurately.

“Synthetic data will only ever be as good as the source data behind it and the human touch will continue to be vital. So even if the costs and scale are coming down, advertisers still need to understand what real people think in order to reach and target them effectively.”

BigSmall founder and strategy partner Ben Cleaver, meanwhile, says that after a brief flicker of confidence earlier in the year, uncertainty has won again; political noise, economic fragility and cost pressures are pushing brands into wait-and-see mode. The result is telling. Short-term online spend creeps up, while brand-building channels, research and main media are quietly hollowed out.

He warned: “That might feel prudent, but it’s a dangerous trade. When everyone chases efficiency, distinctiveness disappears. Freezing investment doesn’t protect brands in choppy markets – it weakens them. The brands that emerge stronger are rarely the ones that paused; they’re the ones 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 final word goes to Marketreach commercial director Phil Ricketts. He said: “The latest Bellwether shows cautious marketing spend in Q4 2025. However, this offers marketers a chance to refocus on what delivers the greatest value. In times like these, trust becomes paramount.

“Political uncertainty, fragile public services, continuing cost of living challenges, paired with the rise of AI and AI-generated content has left the public wary, working out who and what to trust.

“And yet trust is one of the biggest drivers of brand consideration: 74% of consumers are willing to spend more with a brand that they trust. Marketers have the power to shape this across both public and private sectors.

“We cannot underestimate the power of trust in consumer behaviour and commercial growth, and I hope to see marketers harnessing trust in the coming year to prove their impact. Media choices are critical to this. When 42% of consumers’ trust in an organisation is shaped by the medium they are contacted through, highly-trusted and personal channels reinforce campaigns in the short and long term.

“As champions of direct mail, the single most trusted channel, we understand how consumer faith in a brand strengthens relationships and improves campaign overall impact, even in periods of uncertainty.”