Today’s (17 April) Institute of Practitioners in Advertising (IPA) Bellwether report reveals a decrease in overall marketing budgets, although there is confidence things will improve during the 2025/2026 financial period.

Here, industry figures share their thoughts on what the latest data means for the sector.

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Audience remains king

The IPA report explored the rise in budgetary focus towards direct marketing, with many companies having downwardly revised their total marketing budgets in the first quarter of 2025.

Figures showed a net balance of -4.8% of firms cut their marketing budgets, compared to a net increase of +1.9% in the previous quarter.

While, just under a quarter of panel members reported a reduction in their marketing budgets (24.2%), compared to 19.4% indicating an increase.

Graham Field, chief revenue officer for Retail/Media at household-level data analysts Outra, warned the ad spend fall “is more than a trend” it is “a strategic recalibration”.

“Knowing who your customer is, has always mattered. Now, knowing when they’re most receptive, and being able to act on that moment with relevance and precision, is a game changer.”

And Paul Wright, head of Uber Advertising International, said: “Economic environments will always shift, but one thing is clear, investing in attention isn’t just smart, it’s essential.”

“It’s how brands can make their media spend work harder, connect with consumers more meaningfully, and ultimately drive better outcomes.”

Report strengthens the case for Artificial Intelligence

With budgets falling, attention has turned to how brands can maximise success, prompting a need to look at “programmatic and AI-driven tools that maximise engagement and ensure ROI”, said Aleksandra Drozda, head of sales development and efficiency at RTB House.

“These scalable, performance-based advertising strategies [can] ensure brands achieve measurable results and remain effective, regardless of the economic environment.”

Nick Reid, SVP & MD EMEA at DoubleVerify, concurred.

“As tailored AI solutions become more widely available, across open web and walled garden environments like social … they will lead the way for brands aiming for stronger performance and more meaningful business results.”

While Mateusz Rumiński, VP of Product at PrimeAudience, said “marketers can find efficiencies in the tools they use to succeed”, and use “these tactics to drive efficiency”.

“Results can remain strong, even if budgets and impressions are shrinking,” he said.

No matter the area of marketing, AI has an impact said Guy Jackson, chief commercial officer at RAAS LAB.

“By investing in AI-led creativity, advertisers will stay ahead of the curve and distinguish their brands in a crowded marketplace with receptive consumers, unlocking improved outcomes during this period and beyond.”

Focus on partnerships

The Q1 2025 report also highlighted the need for stronger collaboration across the advertising sector. Alexia Nakad, VP of Brands, UK and MENA at data collection platform LiveRamp, said: “No single organisation can see the whole customer journey on its own.”

“Marketers should look to embrace technologies that facilitate these partnerships, including neutral and interoperable data clean rooms that can connect seamlessly across the full range of high-quality data owners,” she said.

PrimeAudience’s Rumiński also stressed the need for partnerships. He said marketers need to “remove the friction of entering into vendor partnerships and operate through curated deals in order to act quickly.”

Capturing audiences at the right moment

Phil Acton, country manager UK at campaign planner Adform said “in today’s fragmented media landscape – with hundreds of identifiers and diverse formats – the days of relying solely on human intuition for media efficiency are over.

“Achieving clear attribution in this omnichannel, multi-ID environment demands game-changing technology that integrates disparate data in real-time,” he added.

Equally, the ongoing trend towards video as a marketing tool cannot go unnoticed, said Julie Selman, SVP and head of EMEA at Magnite.

“As media budgets come under closer scrutiny, video continues to prove its impact as a high-performing, results-driven channel,” she said.

“Brands that embrace the full potential [of video] will be better equipped to capitalise on shifting consumer behaviours across the streaming landscape.”

Connected TV (CTV) should also be a focus for marketers in the coming months, said Ed Wale, VP International at LG Ad Solutions.

“Advertisers are doubling down on channels that offer precision, performance and proof. CTV delivers all three,” he said.

“With over a third of brands planning to increase spend in 2025/26, the message is clear – this isn’t retreat, it’s recalibration with intent.”

Justin Reid, senior director of Global Partnerships Solutions at Tripadvisor, also stressed the “impact of experiential activities in driving this change”.

“The report highlights opportunities in a packed summer of flagship events, especially around women’s sport, and a rising appetite for experiential activities,” he said.

Green shoots of optimism

“While the Bellwether Report highlights a measured start to 2025 for UK marketing budgets, the continued investment in direct, event-based and promotional activity shows that brands remain committed to maintaining strong consumer connections, even in a complex economic landscape, said Elie Kauffmann, head of sales at audio advertising company Audion.

“This outlook is reinforced by the positive forecasts for further down the line.”

He said digital audio continues to stand out as “a resilient and high-impact advertising channel thanks to its versatile attributes”.

“We’ve witnessed this first-hand at Audion, with strong results for the first quarter of this year, despite the broader category trend indicated in the report, a clear sign that advertisers are increasingly recognising audio’s unique ability to drive attention, engagement and emotional connection at scale.”

“As marketers look for efficient and flexible solutions to navigate uncertainty, we believe digital audio will play an even greater role in delivering both short-term performance and long-term brand growth,” he added.

Dean Nagib, commercial director at digital advertising platform Azerion UK, said: “While the decline in UK marketing budgets in Q1 2025 signals understandable caution, the long-term optimism reflected in the current IPA Bellwether Report is encouraging.”

“The uptick in direct marketing, events and sales promotions for example is a clear sign.”