The State of Marketing Budgets in the UK: Navigating Economic Pressures in 2025

In an era where adaptability is key to survival, UK marketers are facing a new challenge: tightening budgets in the face of growing economic pressure. For the first time in four years, marketing spend has seen a noticeable contraction across industries - forcing a recalibration of strategy, investment, and expectations.

At Novus Marketing Solutions, we’ve been closely tracking these shifts to help brands stay resilient and proactive. Here’s what every marketer and business leader should know about the forces shaping the UK marketing landscape in 2025.

Economic Headwinds Are Reshaping Marketing Budgets

According to the Q1 2025 IPA Bellwether Report, UK advertisers have cut their marketing budgets by a net balance of -4.8% - a sobering figure not seen since the peak of the COVID-19 pandemic disruptions. (Source: FT)

This decline is not without context. Several interconnected economic factors are weighing on business confidence:

• Macroeconomic instability: With global trade uncertainty, persistent inflation, and post-Brexit regulatory complications, UK companies are entering the year with caution.

• Rising labour costs: Increases in national insurance contributions and the minimum wage are creating a ripple effect across industries, prompting firms to reassess all non-essential spending, including marketing. (Marketing Beat)

• Sector-specific contractions: Global advertising giant WPP reported a 2.5% decline in revenue in Q1, linked to weakened demand from tech clients and Chinese markets. (The Times)

Strategic Realignments in Marketing Priorities

Though the headlines may seem pessimistic, the reality is more nuanced. Brands are not abandoning marketing - they’re optimising it.

1. Short-Term ROI Takes Centre Stage

Marketers are leaning into tactics that deliver quick wins. Promotional campaigns have surged, with sales promotions hitting a 23-year high, reflecting an urgency to drive near-term revenue. (Prolific North)

This doesn’t mean the death of long-term brand building - rather, it signals a shift toward performance-driven marketing that’s both agile and measurable.

2. Cuts to Traditional Media Spend

Spending on traditional media, particularly video and broadcast, has declined. A net balance of -10.7% of marketers reduced their video advertising budgets in late 2024, marking a significant shift in channel preference. (The Media Leader)

Digital channels, especially those offering precise targeting and conversion tracking, are now seen as safer bets in volatile times.

3. Marketing with Cautious Optimism

Interestingly, the story isn’t entirely bleak. Over 20% of companies reported an increase in marketing budgets in Q4 2024 - an indication that some businesses are using this period to gain a competitive advantage. (School of Marketing)

These organisations are prioritizing innovation, automation, and omnichannel personalisation to future-proof their strategies.

Navigating Forward: What This Means for Your Business

So, what should businesses do in the face of these budget contractions?

At Novus, we recommend three strategic approaches:

• Reassess your channel mix: Shift spending from underperforming traditional channels to high-ROI digital platforms. Focus on data-driven targeting and measurable engagement.

• Double down on performance: Invest in campaigns with clear attribution models. Conversion rate optimization, retargeting, and email automation are essential.

• Don’t cut back too far: History shows that brands that continue to invest during downturns outperform competitors when growth returns. Strategic consistency pays off.

Final Thoughts

The UK marketing sector is at a pivotal point. While economic headwinds are causing understandable caution, smart marketers are adapting, not retreating. With a refined strategy and a focus on efficiency, businesses can not only weather the storm - they can thrive through it.

At Novus Marketing Solutions, we’re committed to helping our partners make the most of every pound spent. If you're looking to rethink your approach and unlock value in 2025, we’re here to support you.

Let’s talk strategy.