Unlock the publisher's digest free
Roula Khalaf, editor -in -chief of the FT, selects her favorite stories in this weekly newsletter.
British advertisers have reduced their budgets for the first time in four years, because the prospect of a trade war has trusted the global economy among major consumer brands, according to an industry sales body.
Advertisement Budgets decreased in the first quarter of the year, the Institute of Practitioners in Advertis announced Thursday on Thursday weaken consumer confidence.
Almost a quarter of the companies included in the IPA quarterly data have declared a reduction in marketing budgets, while only about a fifth said there would be an increase. This pushed the balance in favor of reducing advertising spending for the first time since the first quarter of 2021.
IPA's conclusions are the last proof of a decline among British companies As they struggle with a high increase in labor costs revealed to the budget and the uncertainty of last year launched by an American commercial escalation.
Marketing budgets are closely linked to the feeling of companies, with advertising expenses considered as an indicator of economic perspectives due to the number of companies that set budgets according to expected sales.
Paul Bainsfair, director general of the IPA, said: “Faced with President Trump, frequently reversing political and economic standards, it is understandable that more British companies have adopted a” approach to prudent marketing, “wait and see marketing expenses of this quarter”.
He also underlined other problems that finished the confidence of companies in the quarter, such as the increase in national insurance contributions from employers and an increase in minimum wages, which had led to an “increase in investments in short -term sales promotions and reductions in the main media budgets”.
The IPA said that the difference between business reduction and the increase in budgets was 4.8% in favor of those who reduce spending – a reversal of the previous quarter, when 1.9% of other companies increased their budgets than to eliminate them.
“The first quarter of 2025 announced a significant drop in financial prospects, both at the business level and at the industry level,” said the report, adding that almost a third of the respondents felt less optimistic about their own performance in the first quarter compared to the previous three months. The confidence of the company has fallen at its lowest level since the last quarter of 2022.
Samantha Smith, Director General of April Six (Mobility), a global marketing agency, and the head of IPA City for Bristol, the Southwest and Wales, said: “Where I am not sure that someone knows what the future has in store for us, and if they claim, he is likely to change tomorrow.
The IPA has found that many marketing executives still expect advertising budgets to increase during the year despite a reduction in the first quarter. More than a third of respondents expected an increase in their total marketing budgets, almost double the proportion providing for a drop.
In the first quarter, consumer direct marketing activities attracted the highest spending, followed by events and sales promotions. The media marketing budgets outside, audio and video, have all shrunk.
S&P Global Market Intelligence, which produced the report for IPA, reduced its 0.6%British economic growth forecasts by 1%, partly in response to new American samples from British imports.
However, he did not make any modification to his forecasts for advertising expenses for 2025 and 2026 increase of 1.3% and 1.8% respectively.
