The Q3 2024 IPA Bellwether Report reveals that UK companies paused marketing budget increases for the first time in 14 quarters due to uncertainty surrounding the Autumn Budget. What does the industry think? 

The net balance for marketing budget revisions dropped to 0.0%, a sharp decline from Q2’s +15.9%, indicating a significant shift from the previous growth trend. Despite this, some areas continued to expand, particularly in public relations, events, and direct marketing.

Main media advertising grew for the second consecutive quarter, driven by a surge in video campaigns, though other areas like out-of-home, audio, and online marketing saw declines. Sales promotions also registered growth, albeit at a slower pace than previous quarters, while budget allocations for market research and other paid marketing were reduced.

Company-specific financial outlooks turned negative for the first time in seven quarters, with a net balance of -2.2%, reflecting a shift in sentiment. Industry-wide pessimism deepened, with 29.6% of marketing executives expressing concerns about broader financial prospects. This marks the lowest confidence level since late 2022.

Despite the cautious mood, adspend forecasts for 2024 and 2025 were revised upwards, buoyed by stronger-than-expected economic data. S&P Global Market Intelligence predicts UK GDP growth of 1.2% in 2024 and 1.3% in 2025, with real advertising spend expected to increase by 0.6% in 2024 and 1.3% in 2025. Longer-term, adspend is projected to rise close to 2% annually from 2027 onwards.

IPA Director General Paul Bainsfair emphasised that companies are pausing, not cutting, marketing spend and that stronger economic forecasts suggest this dip may be temporary, with opportunities for brands to gain market share by continuing to invest in advertising.

What the industry thinks…

The downtick in marketing budgets is just the latest in a long list of challenges CMOs face in today’s complex media landscape; one where they’re expected to not only grow business, but balance this with external pressures and sustainability targets.

While I’m very sympathetic to this struggle, I’m shocked to see that sustainability still isn’t a priority in the report findings – mentioned only by the manufacturing industry as a focus for the next 12 months. Yet advertising should, theoretically, be easier to decarbonise than other industries.

What is encouraging, however, is the identification of AI as a long-term strategic opportunity. This sets the stage for marketers to lean more heavily on AI-driven tools to boost media quality and performance, while also cutting carbon emissions. By leveraging responsible forms of AI, companies can not only contribute to more sustainable marketing practices, but also drive better campaign outcomes – making the lives of CMOs just a little bit easier.

Michael Hanbury-Williams, Managing Director UK, Greenbids

Following the budget highs of early summer and big brand advertising opportunities during sporting events in Q3, it was a surprise to see that spend has stagnated, especially with the golden quarter fast approaching. It's vital that advertisers make the most impact by delivering ads in highly relevant locations to better grab the attention of consumers, all the while prioritising brand safety and suitability. By being hyper-targeted with spend in this way, advertisers will be able to navigate this upcoming period effectively.

Fiona Salmon, Managing Director, Mantis

Following a strong first half of the year, we did notice a slowdown, with some clients becoming more cautious. As we approach the end of the year, we’re continuing to invest in areas of the business where we are seeing increasing demand, such as Social, PR, and Media, as well as our core advertising business. Securing new business remains crucial to closing out 2024 on a high note and positioning ourselves for success in the year ahead.

Chris Falconer, Group Managing Director at McCann Central

It's encouraging to see that video campaigns are driving the expansion of main media budgets at the moment — formats such as CTV allow buyers to connect with engaged audiences in brand-safe environments, with the potential to precisely target high-value consumers that are more likely to convert. However, for brands to get maximum ROI and publishers to receive a fair share of revenues, the industry should remain committed to cleaning up the ecosystem from opaque media buying processes, hidden intermediaries and misclassified content.

Joseph Worswick, VP of EMEA, Global Head of Sustainability, OpenX

Stunted total budgets before the always-important Golden Quarter may have marketers worried that they will lack the resources to cut through during this busy period. But as the significant growth in video has shown, the question is not about how much budget you have to spend, but where you spend it.

With only 14% of consumers looking to spend during the key sales days of Black Friday and Boxing Day, marketers must make sure they don’t put all their eggs in one basket. Similarly, half of shoppers state that a discount doesn’t make them more likely to buy a product. Success during this uncertain period will clearly rely upon marketers having a full picture of their target shopper and their buying habits, coupled with the ability to reach them in an effective way, no matter where they are.

Simon Stone, GM International at LoopMe

Q4 is typically the most critical season for retailers and e-tailers, culminating in the all-important Christmas period. However, the latest Bellwether report paints a cautious picture — marketers are being forced to rethink their strategies as consumers pull back amid economic uncertainty. With inflation and the cost-of-living crisis looming large, every marketing placement must now directly contribute to the bottom line. Brands are competing fiercely for a smaller share of consumer attention.

As a result, it’s no surprise that data-driven, high-attention environments like CTV, video, direct mail, and gaming are seeing a surge in marketing investment. Consumers are engaging with these formats differently, absorbing more brand messaging as they spend more time on these platforms. Yet, the growing demand for video and CTV is also driving up media costs, putting strain on budgets originally intended for broader display campaigns.

Although for many, it may feel as if Q4 hasn’t fully kicked off yet, this is not the first time external economic factors have disrupted our industry—and it won’t be the last. I believe that once the dust settles post-budget, we could see a late Q4 surge as brands recalibrate and adapt to the new landscape.

Lisa Menaldo, Co-Founder, The Advisory Collective

Consecutive stagnating budgets have particularly affected open web publishers, something which will come as no surprise to those familiar with their many challenges.  Inefficiencies and signal loss in the open programmatic have made the channel less attractive for buyers over the last few years. To turn the tide, we need to see both ends of the supply chain invest in curation, which plugs the "addressability gap" with the power of the privacy-first data ecosystem to make target audiences more readily available for buyers while reducing publisher reliance on bottom-of-the-barrel CPMs.

Chris Hogg, Chief Revenue Officer, Lotame

The latest IPA Bellwether highlights that businesses are preparing to navigate potential challenges in Q4. With the first Labour Government budget approaching and global conflicts intensifying, brands are operating in a complex environment where the risk of misinformation and inflammatory content is on the rise. It’s therefore imperative that advertisers harness solutions that will help them navigate nuanced brand safety and suitability challenges while still driving performance.  

This is especially important in formats where investment is increasing, including video, as highlighted in the report. As money flows into these areas, bad actors inevitably follow, including those behind sophisticated ad fraud schemes. 

While AI is driving challenges, such as low-quality made-for-advertising sites and disinformation, it also provides solutions to counter these threats. That’s why it’s encouraging to see many companies in the IPA Bellwether already integrating generative AI into their strategies. AI is proving to be a powerful tool for analysing and optimising media, ultimately enhancing brand performance and driving business outcomes.

Anna Forbes, Regional Vice President, Northern Europe, DoubleVerify

While the latest report hints at a dip in financial confidence, the market is far from stagnant. Investment in programmatic media continues to climb, with 96% of display ad spend now flowing through automated pipes — at a recent total of £14 billion. This area of growth is a powerful reminder that even in a more cautious environment, digital advertising opportunities still abound as more media buyers harness trading methods offering complete control over budgets and the ability to maximise efficiency.

Jonathan Haines, Managing Director, UK & Northern Europe at Equativ

Responsible investment and the return on that investment is always critical. And in the current climate, ROI holds even greater importance, as shown by IPA Bellwether’s report revealing UK companies are putting some marketing spend on ice amid uncertainty ahead of the Autumn Budget. With every penny needing to deliver results, marketers should focus on strategies that will help them stand out and drive deeper connections. Consumers are overwhelmed by content, which can make it harder than ever to break through. Personalisation is paramount. In fact, data from our brand trust report reveals that in this era of information overload, nearly half (48%) of consumers expect the right products and services to come to them. To truly connect, marketers must harness AI to deliver personalised experiences at scale, ensuring every investment can make a meaningful impact. Those who do will march ahead of those who are holding back.

Jim Rudall, Head of EMEA, Intuit Mailchimp

Q3 seems to be a temporary blip after 14 consecutive quarters of year-on-year growth for the advertising business. Main media budgets continue to grow, with video taking an increasing share. I’m surprised OOH is down as Digital Core formats sold very well in Q3. It will be interesting to dig into more detail. There's no need to panic, though, as the sector has consistently grown since 2022 and remains in great shape.

Nigel Clarkson, CRO at Taptap Digital