Industry responds to Budget: 'Don't panic, don't panic'

Rachel Reeves’ Autumn Budget has thrown up the traditional mix of winners and losers, with increasing tax burdens on businesses, dampening consumer confidence, and reducing the attractiveness of selling agencies via Employee Ownership Trusts (EOTs) offest by positive aspects such as investment incentives.

And, while some analysts have characterised the overall impact as “pro-growth, pro-business promises”, Advertising Association chief executive Stephen Woodford says it is hard to see how increasing employers’ costs, including for those in advertising, as well as higher taxes for the public, are going to encourage more economic growth.

However, Woodford added: “There are welcome changes to skills, including fully funded apprenticeships for under-25s in SMEs. It is positive to see skills investment aligned with the modern Industrial Strategy’s growth-driving sectors, which includes the creative industries, and the prioritisation of digital skills programmes such as the £187m ‘Techfirst’ initiative. Allocation of a Creative Places Growth Fund to regional clusters will help unlock innovation in areas where advertising can play a key economic role.

“Still, further reform of the Growth and Skills Levy is needed to make it workable for all employers. We will continue to work with the government to ensure the best solutions are found to sustain our industry’s talent pipeline.”

Meanwhile, IPA director general Paul Bainsfair says that while there did not seem to be much in the budget for the advertising and marketing industry specifically, the planned investment in AI and the digital economy, alongside the commitment to making the UK an attractive place for start-ups and scale-ups will help the UK’s creative sector maintain its position as a world leader in creativity and innovation.

He added: “We look forward to hearing more detail on the announcement that training apprentices under the age of 25 will be free for SMEs. As we know, apprenticeships are a vital way for agencies to bring in, train and develop young talent, helping to future-proof our talent pipeline.

Kantar managing director solutions and marketing effectiveness practice Dom Boyd, however, reckons the Budget will trigger a distinctly wintery spell for consumer and business confidence. And the chill is going to create a stress-test for marketers.

He added: “Rises to minimum wage are handsomely offset by the impact of frozen tax thresholds – effectively a stealth tax – which will impact middle income households the most, while businesses are facing higher costs.

“And that creates a challenging environment for marketers where consumers will be much more choosy about what they buy, and businesses will be more cautious about what they spend. It’s a moment where weak brands are going to get found out, and strong trusted brands will thrive because consumers will trade down unless brands prove their value.

But marketers must not press the panic button by racing to cut investment or prices just when resilience is most needed, Boyd insists. Instead this is a golden opportunity for marketers to make their mark by doubling down on brand building fundamentals which drive pricing power, predisposition and presence.

He continues: “That means protecting and increasing share of voice, by creating distinctive, memorable emotional connections, by innovating new services that create extra value and – perhaps most critically in the new AI-enabled LLM search world – by ensuring they show up in the right way, at the right time, in the right channels to give audiences reasons choose to them when it matters.

“Winter has come. But it’s the brands that base their decisions on deep customer insight, think creatively to find new opportunities and demonstrate compelling value in the moments that matter who will thrive come springtime.”

Finally to MSQ chief operations and finance officer Dan Yardley, who says it would have been great to see a budget with initiatives to encourage growth and investment in the economy.

He added: “Our industry tends to perform well when the macroeconomic picture is healthy. While we understand the challenges, this Budget doesn’t appear to be one focused on the creation of jobs and growth, rather finding a way to cover existing commitments and stopping anything bad from happening.

“It reinforces what we’ve long understood: brands can’t afford to wait for perfect macroeconomic conditions to create momentum. While we’d welcome measures that more actively stimulate growth and investment, the reality is that budgets like this one — focused on stabilisation rather than expansion — underscore why agility and efficiency matter more than ever.

“While this Budget may not actively accelerate the advertising sector, it does clarify the landscape. Brands now need partners built for resilience and results, not just scale.”

Industry responds to Budget: ‘Don’t panic, don’t panic’

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