How will agencies weather the storm after an unsettled IPA Bellwether report?

So, how has agency land in the UK reacted to this latest blow? How will it impact their business planning and growth ambitions for 2025?

No cause for panic

Chris Camacho, CEO, Cheil UK: “The IPA Bellwether Report’s Q3 results may signal a pause in advertising budgets, but it’s important to note – this is not a cut, nor is it a setback. Instead, this temporary hold presents an opportunity to maintain momentum, using the progress made in 2024 to strengthen client relationships and keep moving forward. Looking ahead, 2025 will be a year of continued adaptation, focusing on areas like experiential, e-commerce and CRM to meet evolving client needs. This isn’t a retreat; it’s a recalibration and one we’re ready to navigate for continued success.

Cade Heyde, global partner, Special Group: “While the report might suggest a pause in advertising budgets, we’re not currently at a stage where anyone should be panicking or changing their plans. When the market slows down, finding creative solutions to problems becomes even more critical. Brands are under pressure to work smarter with smaller budgets, and that’s where creativity can truly shine. It has been proven time and again that it’s the businesses that invest in bold ideas during tough times that come out ahead. That’s why this situation presents agencies with an opportunity to help their clients through these challenges. At Special, our independent and agile approach thrives in these moments. Over the next 12 months, we’re doing the opposite of slowing down by doubling down on our ambitions instead. Because in challenging times, creativity isn’t optional – it’s essential.”

Chris Woodward, CEO, CTI Digital: “The ups and downs of the economic cycle are a fact of life. And irrespective of whether the economy is strong or weak, our goal is always to outperform the market. We’re doing that. What’s been particularly challenging this year is the lull in spend before the election, and the constant doom and gloom since. The government is talking the economy down and is not setting a vision. Business, like most things in life, relies on one thing that costs £0 - confidence. Can we have some confidence please prime minister? And maybe a little bit of vision too?”

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Barney Worfolk-Smith, chief growth officer, Daivid: “For context, this Budget is nearly four months after Labour’s win and the last time there was a hiatus anywhere near this long between an election win and a budget was the Coalition Government in 2010 (42 days). So, to be clear, this is a pause of budgets, not a ‘failure to grow.’ People are nervous. We will push on with our growth plans regardless as we operate globally so the UK’s situation only creates partial exposure; we operate in effectiveness, which is likely to maintain its growth due to a wider drive towards ad efficiency; and what else are you supposed to do, sit in a hole?”

Sam Lecoeur, chief client officer, adam&eveDDB: "After such a prolonged period of relative growth, there was bound to be some industry nerves rattled when the 0% net balance figure appeared in Q3’s report. However, the reasons are clear given the clamour around the upcoming budget and the broader landscape of economic uncertainty. Reassuringly though, we have some recent muscle memory formed from much tougher times to help inform our growth planning process. We recognise that investing ahead of the competition in challenging times can yield disproportionate rewards for brands and agencies, so see this as a real opportunity. So, despite the dip in the market, we’re continuing to invest in talent, our culture and in particular our products, to provide our clients with the services they need. Overall, we know that in tougher moments the most meaningful client and agency relationships are built through demonstrating clear leadership, so we’re planning on holding our nerve."

Tom Stone, co-founder, re:act: “The latest IPA Bellwether report highlights a cautious sentiment across the industry, largely due to uncertainty surrounding the upcoming Autumn Budget and the new Labour government. While total marketing budgets have stalled, the growth in media spending, particularly on video campaigns, is a promising development. Video touchpoints are becoming essential for consumers, and this shift will likely drive demand for more creative, social, and digital content. The stalling of marketing budgets reflects broader business uncertainty rather than an industry-specific issue. Once there is clarity around government policies, companies will likely re-evaluate their business models and find efficiencies to reinvest in marketing. Historically, brands that continue to invest during economic downturns tend to come out stronger in the long run. Overall, while the cautious tone is understandable, the report’s insights suggest that there is still significant potential for growth, especially in media and digital sectors.”

Time to refine strategies

Ric Hayes, group strategy director, SocialChain: “The latest Bellwether Report signals a cautious pause in ad spend as brands assess the current economic landscape. But for agencies, this moment is less about retreat and more about refining strategies. Clients are looking for more value from every pound, which creates a clear demand for fresh insights from all available data points, and clearer demonstrations of campaign effectiveness. Agencies that can deliver on these fronts will be able to strengthen their market position. Given this, the reduction in market research budgets is notable and may point towards an increased need for AI and synthetic data solutions, which could reshape how insights are generated from a cost and speed point of view. It’s an evolving landscape, and those who adapt quickly will lead the charge. Looking ahead to 2025, agencies should remain committed to growth, even if this dip becomes more drawn out. Brands that maintain investment in strategic, high-impact areas, such as video, will be well-positioned to outpace competitors when market confidence returns.”

Ed Palmer, managing director, St Luke’s: “The impact of the budget is clearly affecting our clients’ decision-making, and we’re watching the developments as closely as anyone. But if we’ve learned anything from the last 10 years of world events, it’s that however fanciful your projections for the future, something altogether more batshit is bound to happen. Forecasting for volatility has become the norm, and in a year in which Ukraine, Gaza, the US election, the ever-expanding tax burden, fragile supply chains and the future of Strictly all remain hugely unpredictable, it’s wise to continue in that vein.”

Adrienn Major, founder, POD LDN: “The IPA’s latest report is not a surprise to us, as we have been hearing about budget cuts for a while now from a number of sources. As a result, we have been fine-tuning our offer to cater for more budget-conscious clients. Clearly, clients pausing on budgets is concerning, but while we are cautious, we also know that as a company we achieve our biggest growths in this climate by providing cost-efficient solutions with transparent pricing. And by offering specialist services like repurposing of existing content, we can make clients’ assets work harder even if they are putting spending on hold.”

Jon Goulding, CEO, Atomic London: “The prediction of choppy waters from the last Bellwether Report is unfortunately coming to pass, with spend projections and confidence levels dropping from their record highs. Until the UK economy stabilizes, the new Government makes progress, and the US election is resolved—one way or another - this uncertainty and delay are likely to continue. What remains true, as it was 12 months ago, is that flattering investment levels in many of the faster-growing scale-up brands are still in short supply. While this presents challenges for some, it also creates opportunities for others. A lack of financial resources can be a powerful asset if it encourages you to be more innovative and creative than your competitors—not just in the media silos highlighted here, but through the creative collision of different disciplines. This approach opens up new, exciting, and more distinctive areas for growth, leveling the playing field and creating broader opportunities for many, not just a few.”

It's not all bad news

Jason Megson, SVP, International Business, Sparks: “While there are clear pressures on marketing and advertising budgets – and maybe that will manifest in a ‘pause’ for some brands – the value of in-person interactions means events and experiences are proving resilient. This isn’t just me being bullish about our business, the IPA’s Bellwether Report for Q3 2024 supports this position as it showed the event sector is still growing. This certainly aligns with what we’re seeing in the UK and across EMEA, where brands in all countries are keen to invest in real-world experiences to build their brands in more varied and exciting ways. So our growth plans remain steady. Live events benefited from a post-Covid boost as in-the-moment, shared experiences were valued in a new light – and that trajectory has continued thanks to their direct consumer connection and ability to build long-term brand equity.”

Rebecca Crook, chief growth officer, Modern Citizens: “It’s only natural that the upcoming Autumn Budget is slowing down decision-making for marketers as they await the outcome and consider its potential impact on business in 2025 and beyond. However, with inflation stabilizing, the good news from the IPA report is that consumer confidence is gradually returning, especially in the retail and FMCG sectors. Still, brands shouldn’t become complacent. Investment in enhanced customer service and experiences is crucial to standing out from competitors and encouraging consumers to spend. While the report shows that UK marketing budgets have failed to grow for the first time in 14 quarters, this is expected given the looming Budget and wider geopolitical issues, which could drive up costs. On a positive note, as the cost-of-living crisis eases, consumer confidence is picking up. Additionally, many brands are leveraging generative AI to boost efficiency and refine both marketing strategies and product development.”

Alex Marks, head of marketing, Posterscope: “It’s not a surprise that there’s some caution at the moment. Next week’s budget will give us a better picture of where the economic future lies and how that might impact brand spend. Our plans for 2025 are unlikely to be impacted though. We have good sight of our clients’ investment for next year and should budget squeeze happen that will just drive creativity, which is no bad thing.”

Sophie Meadows, creative strategist, The Frameworks: “The latest IPA Bellwether report highlights that marketing budgets have stagnated for the first time in 14 quarters. Although disappointing, this makes sense in the context of the Chancellor’s upcoming Autumn Statement and the approaching US election; given the current economic uncertainty, it’s no surprise that companies are pausing their investments. However, it’s important to note that budgets aren’t shrinking, and main media advertising, particularly video, has grown for the second consecutive quarter. The IPA has also revised its ad spend forecast upwards for Q4 and 2025. We’re cautiously optimistic – and we’re certainly not planning to put any of our own plans on hold. As ever, when budgets are tight, it’s up to agencies to flex and be smarter with our recommendations. Creativity is not just about beautiful and engaging content; it’s as much about imaginative media choices, being constantly adaptable and finding new techniques that double-down on cost-effectiveness.”

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