The state of the market going into 2026

It’s my first day working after a Christmas break, so I’m summarising various conversations I’ve had with agencies and brands throughout Q4 2025 (and the odd message exchanged in the past 2 weeks):

I am expecting you all to have a busy January (at least, the well-positioned and fairly salient among you)...

Almost globally we’ve had trade uncertainty; fallout from wars and pandemics; and various other reasons that account for a slowdown in new business.

In the UK, additionally, the government badly fumbled the autumn statement. I shall not be declaring political affiliations in this article (I’m old enough to have voted for three political parties in different general elections, although won’t be making it a fourth NIGEL), but here’s what I’m seeing (and please note I’m not a retail analyst, even though I’ve pretended to be one on behalf of spread betting clients in the past):

• Brands almost always hold off making investments when a budget is on the horizon. Even in good times, they’re in a “wait and see how this affects us” frame of mind. Think of it like a brief hesitation before they press the “go” button
• The Spring Statement was more brutal for businesses of almost all sizes than any previous budgets in recent memory had been, so there was more nervousness going into this one…
• …so when the government chose to start, as we say in agencyland, “managing expectations” several weeks before the announcement, businesses feared the worst
• Whereas after most budgets, brands have their investment plans pretty much ready to go, assuming that the chancellor won’t do them a mischief…this time, many brands hadn’t bothered to make plans, so there’s no big red flashing “go” button to press
• The exception being, since the default over the last few years has been “cut” rather than “spend”, some brands seem to have had downsizing plans ready to go; waited to see if the government will give them a break; and decided to go ahead and press that button anyway
• Then, since the Autumn Statement 2025 was a full month later than the previous year’s budget, retail brands were in full Black Friday flow and, then, it was basically Christmas (the timing of the budget, as well as the press campaign in the build up, also felt odd - and probably damaging)
• They’ll also have been waiting to see how the festive trading period treated them (Black Friday is called Black Friday because it’s the day that retailers get out of the red and into the black, after all). Growth was forecast, with a “Super Saturday” on 20th December seeing a significant spend…after all, the public also waited to see how the budget affected them before over-spending.

So, investments in marketing are a little later than usual. But it feels like those investments are coming because:

• Many brands have downsized their in-house departments over the last 12 months (and some even more recently), resulting in reduced capacity
• Two successive budgets have effectively penalised job (re)creation, so it makes sense to outsource Employer National Insurance Contributions to an agency, instead of footing that bill yourself
• The narratives around some of the most disruptive technologies are settling down, at least a little (be honest…are you much clearer now about how you’re going to invest in AI than you were six months ago?) and brands can’t hesitate on everything forever
• The UK economy is now worse than most other major countries’ are and, at some point, we have to choose to do something about that

What has been happening recently?

One thing that FDs and CFOs hate during an economic downturn is substantial fixed overheads…hence the staff reductions on the brand side. It might technically be cheaper for a company to in-house its marketing function but, unlike an agency, you can’t turn staff off and on when you want to.

You can, however, choose to pay your agency’s invoices late, or wriggle your way out of a contract (perhaps you’ve noticed?) so that’s been the preferred choice for lots of clients.

PPC also can be turned off and on (not that this is something we’d generally recommend), so that’s got more investment than the comparatively long-term tactics associated with SEO, PR, and brand-building channels. As a result, performance marketing deals have been going ahead with much greater frequency and general gusto than other disciplines (that’s why you might have seen an abundance of paid media jobs, mainly on the agency side; and a comparative lack of jobs in other channels, like SEO and PR).

A lot of brands will have noticed also that traffic is almost universally down in organic search but revenue generally isn’t, so some of those plans are likely to go ahead in Q1 this year.

…and a rebrand or a new website will have been a long way down the wish list, for example, but some of those investments seem likely to get the green light. We saw Black Friday weekend extend into Black Friday month in 2025 and, if I was a brand, I’d want to build a stronger brand going into 2026 so I didn’t have to spend the whole month with my pants down (but I’m basing my prediction on actual conversations, rather than just that’s what I’d do).

…

I’m not trying to make things sound overly rosy, of course. But I do want you to go back to work today expecting that the phone is going to ring with more frequency…and to plan accordingly (how are you going to answer? How are you going to generate even more enquiries, while brands might be spending? How are you going to post more positive things on LinkedIn, knowing that “things have been hard” is actually turning off your customers?)

I’m here to help…but I think you’ve got this.