The first quarter of 2025 saw a significant shift in budgets for market research, the quarterly data found, with 20.2% of panellists surveyed reducing their spend on market research – more than double the 9.7% who revised their spend upwards.

The resulting net balance of -10.5% – compared with +3.1% in the previous quarter – is the lowest reading in four years.

Despite this decline, the report also found that a net balance of +3.1% of marketing executives surveyed foresee a rise in market research (which includes qualitative and quantitative, brand tracking, econometrics and product development research) spending during the forthcoming financial year, suggesting optimism over budgets.

The decrease in research spend sits within the context of an overall decline in marketing budgets in the first quarter. A net balance of -4.8% of UK companies cut their marketing budgets, compared with growth recorded in the previous quarter at a net balance of +1.9%.

 Just under a quarter of panel members reported a reduction in their marketing budgets ( 24.2%), with 19.4% indicating an increase.

The data found reduced spend in main media, out-of-home, audio, published brands and video, while budgets expanded for direct marketing, events and public relations. ‘Other online advertising’ saw a slight increase in spend.

According to the Bellwether’s analysis, anecdotal evidence suggested ‘declining sales and reduced revenue’ led to a reallocation of marketing spend.

The report features data drawn from a panel of around 300 UK marketing professionals. Data for the Q1 report was collected prior to the 2nd April announcement of tariffs from the US. However, panellists were already wary of potential increases in the costs of exporting and importing, and subsequent effects on product pricing and customer demand, according to qualitative findings from the report. Other concerns expressed included supply chain disruption, weaker consumer confidence and a return of high inflation.

Increased investment in near-term tactics

Paul Bainsfair, IPA director general, said: “In the face of President Trump frequently overturning political and economic norms, it’s understandable that more UK businesses have adopted a cautious, ‘wait and see’ approach to marketing spend this quarter. Even before the introduction of US tariffs on 2nd April (thankfully now paused), the anticipation alone – combined with rising costs from National Insurance increases and the minimum wage hikes – was already influencing budget decisions.

“We’re seeing a familiar pattern emerge in these challenging times: increased investment in short-term sales promotions and cuts to main media budgets. While these adjustments may offer immediate relief, they are not a sustainable path to long-term brand growth. That’s why it’s encouraging to see that, when looking ahead to annual marketing budget plans, many businesses are preparing to reinvest in main media, demonstrating a continued belief in the importance of brand building, even in uncertain times.”

The latest Bellwether data provides “evidence of resilience” for marketers despite macroeconomic challenges, said Maryam Baluch, economist at S&P Global Market Intelligence and author of the report. “Surveyed executives remain optimistic about the future on balance. Over 36% anticipate an increase in their marketing spend for the 2025/26 period, reflecting businesses’ commitment to driving growth and sales through volatile trading conditions,” Baluch said.

Cutting research a ‘false economy'

Dom Boyd, managing director of insights at Kantar UK, cautioned against the ‘false economy’ of reducing spend on research.

Boyd said: “It can be tempting to cut research when budgets are under pressure. In reality though, we all know it’s a false economy. Brands need to stand out and connect with customers in a meaningful way to justify their prices and protect margins. Without the insights that help us understand what consumers want, need and expect from a brand, marketers are left taking shots in the dark."

Discussing overall marketing cuts, Boyd noted: “Brand building gives businesses options – the power to hold or to even put prices up without shedding volume or denting profit margins. Amid so much uncertainty, that room for manoeuvre is invaluable. Chopping budgets might seem like the answer now but boardrooms will likely regret it down the line. It takes time to build strong, meaningfully different brands and right now, firms in a weaker position don’t have a minute to waste.”

Bill Doris, vice-president of analytics, Emea, EssenceMediacom and IPA media research advisory group chair, said: “The market research sector has hit a bit of a bump this quarter. It’s a bit of a reality check after the positive growth we saw recently. Businesses seem to be tightening their belts, reallocating funds elsewhere amid current economic uncertainty. That said, there’s a glimmer of hope as companies are still optimistic about increasing market research spending in the next financial year (+3.1%). So, while it’s a challenging moment, it looks like research might just bounce back as businesses refocus on understanding their audiences better.”

Jane Frost, chief executive at MRS, had the caveat: “The IPA Bellwether report only tracks the proportion of spend that is commissioned in marketing departments. Increasingly, companies are buying research through other budget holders – such as operations for customer service, for example. A significant market for research is the public sector, also not counted here.”