Irish advertising, marketing and communications agencies expect client spending to stagnate or even shrink this year amid heightened economic uncertainty, despite reporting stable or growing revenues in the early part of the year.
An Amárach Research survey of the industry, commissioned by the Institute of Advertising Practitioners Ireland (Iapi), points to an ambivalent mood among agencies.
While two-thirds of the 36 agency chief executives surveyed reported that their clients have increased or at least maintained spending levels so far this year, a large 81 per cent majority expect spending across the wider industry to remain flat or even fall for the full year.
This is a “clear sign of caution”, Iapi, the advertising and marketing industry trade body, said in its first Pathfinder Pulse Survey report on Thursday.
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The survey results suggest a degree of disconnect between optimism at the agency level and more cautious sentiment across the wider industry, the trade body said.
Marketing and advertising budgets are often the first casualties during times of economic stress, meaning confidence levels within the industry are sometimes seen as a bellwether for the wider economy.
Siobhán Masterson, chief executive of Iapi, said the survey results are an “early barometer” for business activity. “Agency workloads and budgets respond quickly to economic shifts,” she said.
“Pathfinder captures how confidence and caution are evolving across the economy. With Irish exports facing heightened global pressure, including €17.1 billion in exports now facing potential elevated US tariffs, these findings provide real-time evidence of the impact on the services sector.”
Economic uncertainty and market conditions were the top concerns for agencies across the different sectors in the Pathfinder survey, with 36 per cent citing the macro environment as the biggest challenge this year.
Client procurement and budgets were second, with talent recruitment and retention also key concerns for agencies in 2025.
Agencies view expanding their existing services as the biggest potential driver of growth this year, as well as the adoption of new technologies such as artificial intelligence.
The Pathfinder report will be published on a quarterly basis as “a high-frequency indicator of business confidence”, Iapi said.
The publication of the inaugural report coincides with Iapi’s annual leaders’ summit in Dublin on Thursday.
Speakers, including An Post chief executive David McRedmond and Element Films co-founder Andrew Lowe, will address the conference along with executives from Irish Distillers and Musgraves among others.
