The report sees UK companies revising marketing budgets up to the second highest level in two years, despite tough economic conditions.
The Q2 2026 Bellwether Report has chimed with good news, with events leading advertising budget growth as the experience economy continues to thrive.
The report revealed that UK companies have revised their marketing budgets up to the second highest level in two years in Q2 2026, despite economic and inflationary headwinds.
After a strong start to the year, 23.8% of respondents reported an increase to their marketing spend, compared with 16.9% who recorded cuts.
The resulting net balance of +6.9%, slightly below Q1’s +7.3%, pointed to a historically strong expansion in budgets. Meanwhile, approximately 59.4% of respondents left their marketing budgets unchanged in Q2. A shift that suggests much-needed stability is coming to a market which has been defined by shifting sands and constant transformation.
We see signs that businesses understand the importance of investing in long-term brand building.
Paul Bainsfair, Director General of the IPA
Paul Bainsfair, Director General of the IPA, explained: “The overriding message from this quarter’s report is that UK companies continue to recognise the value of advertising. Encouragingly, we also see signs that businesses understand the importance of investing in long-term brand building; within the main media category, investment in video advertising has been revised up to its highest level in almost two years, while spending on other online activity – a shorter-term activation medium - has been cut for the first time in seven quarters.”
Bainsfair also acknowledged the wider geopolitical and economic issues impacting the market, sharing: “Despite these positive markers, it is understandable that companies’ financial confidence levels have taken a hit this quarter. Amid geopolitical turmoil, wars, ongoing heightened inflation, supply-chain disruption, not to mention political upheaval closer to home, it makes for an undeniably tough and uncertain environment in which to operate.”
In this challenging market, he urged businesses to recognise the importance of consistency, adding: “It is more important than ever that companies play the long game and continue to invest in brand-building media that is proven to be better placed to drive sustainable business growth.”
The fact there hasn’t been a considerable scaling back of activity in response to the economic shock arising from the Middle East war suggests firms are taking a strategic, longer-term view.
Maryam Baluch, Economist at S&P Global Market Intelligence
As in the opening quarter, events was the leading category for greater marketing investment with a net balance of +11.0% registering growth, albeit down from +14.7% in Q1.
Direct marketing registered a modestly positive net balance of +3.0%, down slightly from +3.6% at the start of the year.
Main media advertising and PR also recorded modest growth in budgets at +1.5% and +1.4%. However, net balances retreated notably in the latest quarter, down from +4.5% and +6.0%, respectively.
A breakdown of the main media segment showed that Video was the only one of the five tracked sub-areas to record growth in Q2, with its net balance rising from +5.7% to a seven-quarter high of +8.2%.
Meanwhile, budgets for Audio stabilised (net balance of 0.0%) after 12 consecutive quarters of decline.
There was no respite from the contraction in the publishing sector. Published brands recorded the sharpest contraction, with the net balance broadly unchanged at -8.3%, from -8.5% in Q1.
Other online was the second-biggest drag on overall main media spending, as respondents cut budgets for the first time in seven quarters. The net balance fell to -5.1%, marking a reversal of the +5.7% reading seen in Q1. Out of home saw only a modest decline, with the net balance having risen notably from -11.3% in Q1 to -2.5% in Q2.
Sales promotions also saw an uptick in budget availability during Q2. However, the net balance of +0.9%, down from +2.7% in Q1, pointed to only a mild increase.
Marketing executives reduced budgets for both market research and ‘other’ activities, the latter covering all remaining paid-for marketing activity, during Q2. The net balance for market research improved to -4.1%, from -8.5% in Q1, indicating a moderated but still strong reduction. By contrast, the other category weakened further, with its net balance falling to -10.8%, from -8.9% in Q1.
However, the report revealed that sentiment among Bellwether panellists regarding company-own and industry-wide financial prospects took a turn for the worse during the latest survey period. Marketing leaders are adopting a universally negative outlook on the economy.
After showing a recovery in the previous survey period, the net balance of respondents predicting better financial prospects at their own business slipped to -9.6% in Q2, from +0.6%.
Underlying data showed that nearly a third of respondents (32.3%) felt less upbeat about their financial outlook than they did three months ago, more than offsetting the 22.8% of firms that were optimistic.
After rising to a five-quarter high in Q1 with a reading of -21.0%, the net balance of firms anticipating better financial prospects for their industry as a whole fell to -25.1% in Q2. A trend which points to growing pessimism about the market. In particular, 36.5% of panellists expect a deterioration in industry-wide conditions, more than three times the share that anticipate improvement (11.4%).
S&P Global Market Intelligence’s forecasts for UK GDP growth in 2026 are broadly unchanged at 0.6%, from 0.5% previously. While the war in the Middle East and its knock-on effects were factored into the previous forecast, developments since have limited the capacity to be more optimistic.
Higher energy prices and inflation more broadly are damaging to household real incomes, while uncertainty and tighter financial conditions will weigh on business investment. Growth should improve in 2027, although the forecast is less positive than it was in the Q1 Bellwether Report (0.8%, down from 1.4%). As pressures from energy prices retreat, disposable incomes should rise, supporting better consumer spending prospects.
For adspend, S&P Global projections remain positive, with growth in real terms expected in 2026 despite purchasing power being hit by higher inflation. Our forecast is for adspend to grow by 2.1% in 2026, before rising 2.3% and 2.4% in 2027 and 2028 respectively.
Maryam Baluch, Economist at S&P Global Market Intelligence and author of the Bellwether Report, explained: “Bellwether panellists have demonstrated notable resilience against a backdrop of persistent economic uncertainty. By continuing to bolster marketing spend – particularly as high inflation threatens to weigh on consumer demand – respondents are indicating a commitment to investment and brand-building activities that underpin growth.
She continued: “The fact there hasn’t been a considerable scaling back of activity in response to the economic shock arising from the Middle East war suggests firms are taking a strategic, longer-term view rather than getting bogged down in short-termism."
Industry leaders have their say on the Q2 IPA Bellwether Report
Veronica Norcross, Global Client Lead at Jellyfish
Whilst this report is in line with the Q1 version released a few months ago, what we're seeing is a significant amount of caution from clients when it comes to spending. At the same time, they're doubling down on foundational efforts to ensure their spend is being directed at the right channels, and that they're set for the agentic future. This means a stronger focus on measurement, particularly MMM (Mixed Media Modelling), as well as SEO/GEO and site-side work to ensure readiness for agentic commerce.
We hear a lot about the money being spent in visible media activity, but not the budgets going into this foundational work, and that's where we're seeing so much of the focus right now. The time, effort and money being invested will stand the companies making the investment in good stead in the years to come.
Amy Lawrence, Head of Digital, EMEA at Publicis Imagine and Chair of the IPA Digital Marketing Group
Despite a more challenging economic backdrop, it is encouraging to see marketers continuing to invest in channels that support long-term growth. While overall main media budget growth softened slightly in Q2, video advertising stood out with its strongest performance in seven quarters, suggesting sustained confidence in brand-building media. The reversal in other online spend, meanwhile, points to a more selective approach to investment, giving the impression that marketers are becoming increasingly focused on where budgets can have the greatest impact on both brand and business performance.
Mark Howley, Chief Operating Officer at Publicis Media and Chair of the IPA Media Futures Group
The Bellwether Report indicates a broadly positive environment. Hopefully a strong England World Cup performance will provide a better than anticipated Q3 trading environment, so actual growth may even be higher than this forecast.
Bill Doris, VP Analytics Lead, EMEA, WPP Media and Chair of the IPA Media Research Advisory Group
The latest IPA Bellwether Report Q2 2026 shows market research is still navigating a bit of a dry spell, hitting its sixth consecutive quarter of budget cuts. About 15.7% of companies trimmed their spending, leaving a net balance of -4.1%. While that’s a solid decline, it's actually an improvement on Q1's -8.5% and significantly less severe than the -13.7% plunge executives originally feared for the 2026/27 financial year. Is AI posing a direct risk to traditional, human-led research business models.
Jim Kelly, Deputy Managing Director and Head of Planning at Story and IPA Chair for Scotland
It feels apt as the latest Bellwether Report is published to talk about a game of two halves. On one hand, it’s highly encouraging at a headline level to see just how resilient the sector appears to be despite the never-ending turbulence both domestically and internationally. With nearly a quarter of respondents reporting an increase in spending, the report describes it as being a ‘historically strong expansion in budgets’. On the other hand, with the healthiest increases being reported in Events and Direct marketing, this indicates a perhaps understandable focus on lower funnel conversion. Meanwhile, many main media budgets are reported as contracting and my underlying worry remains that long term brand investment is taking a back seat to the short-term commercial outcomes. The final result? It’s probably a score draw right now.
Sue Benson, Managing Director of The Behaviours Agency and IPA Chair for England and Wales
Reading this quarter's report brings a mix of relief and reality. While another quarter of budget growth is fantastic news, the sharp drop in industry-wide optimism tells us that everyone is still feeling the pinch. My peers across England and Wales are experiencing this, daily budgets are available, but the nervousness is real. In these choppy economic waters, short-term activation is tempting, but brand memorability remains your best defence. Brands only grow when they are totally unignorable. Let’s use these resilient budgets to build deep consumer connections that stand the test of time. Onward.
Samantha Smith, CEO of Krow Kinetic and IPA City Head for Bristol, South West & Wales
Despite another challenging quarter for the economy, it’s encouraging to see UK businesses continuing to back marketing, with budgets rising for a second consecutive quarter and at one of the strongest rates in the past two years. Events remain the standout area of investment, highlighting the value brands are placing on meaningful, face-to-face connections. Although confidence in the wider economy has dipped, marketers are showing real resilience by looking beyond the short term. Rather than pulling back, they’re investing in growth, embracing new opportunities through AI, innovation and stronger customer relationships.
Penny Took, CEO of Mediaplus Connect and IPA City Head for Birmingham and the Midlands
The fact that marketing budgets are holding their own and, in some areas, increasing, is a substantial win for the industry in a global climate where the underlying backdrop is one of uncertainty and instability in so many areas. The industry is not immune to this uncertainty, with employment prospects remaining fragile, but this also reflects the reality of new ways of working, and how and where we embrace AI. As in all periods of huge change there has been turbulence, but I am confident that our industry will become stronger, more creative and deliver even better results because of it.
Nichola Elgie, Senior Account Director at Drummond Central and IPA City Head for Newcastle and the North East
While the headline is that marketing budgets are holding up, I’m not sure how much of a positive story it’s telling. Spend on events is up for the second quarter and very much leading the show, and the only main media increase is for online video. Are we simply building brands that become recommended by AI models - as we know, LLPs scrape data from online sources such as Reddit, TikTok and other social channels. I do worry that adapting a marketing budget with a focus on how a brand is found by AI feels very short-termist and I’m keen to see what Q3 has in store and whether this will start to reverse.
Sarah Logan, Head of GTM, EMEA at Intuit Mailchimp
The latest IPA Bellwether Report is another strong vote of confidence in marketing. A second consecutive quarter of budget growth - and the second-highest investment levels in two years - shows that, despite ongoing economic pressure, businesses continue to recognise marketing as a driver of growth rather than discretionary cost.
It is no surprise to see direct marketing amongst the biggest investment priorities, as brands increasingly look for channels that deliver relevance, immediacy and measurable impact. Importantly, direct marketing plays its strongest role when part of a wider omnichannel approach that collectively maximises reach, builds stronger connections with customers and ultimately accelerates growth.
According to Intuit Mailchimp’s ‘Art of the Opt-in’ report, a similar proportion of consumers have opted into a brand’s email list (67%) as they have into a brand's SMS list (56%) over the last 2 years. Moreover, 83% of businesses now report having an SMS list, and investment in SMS matches email nearly one-to-one with about 9 in 10 businesses reporting moderate to significant investment in each. With direct marketing continuing to show its value, those that build strong omnichannel foundations now will advance ahead of the competition for consumer attention in the future.
Matti Yahav, Chief Marketing Officer at Fiverr
The most interesting thing in the latest IPA Bellwether report is where marketers are choosing to put their money.
Events and PR are growing because, in a world where anyone can generate almost unlimited content, people are looking for something real. They want trusted voices, shared experiences and communities they can be part of. AI can help us make more, but more content does not automatically create more attention or more trust.
The same is true for creativity. AI has made it faster and cheaper to turn an idea into a video, an image or a campaign. On Fiverr, demand for AI video creation in the UK has risen by 21%, following a 66% increase last quarter. At the same time, UGC video has risen by 41% in the UK. That tells us businesses want to create more content, faster, but they still need creators who understand the audience, the platform and what feels authentic. Businesses are clearly embracing these tools, but the technology is only part of the story.
What matters now is the human work around it: the idea, the taste, the judgment and the understanding of the audience. AI can produce ten versions of something in the time it once took to create one. The marketer’s job is deciding which one is worth putting into the world.
That may also explain why video is growing alongside investment in PR and events. Brands need to create at speed, but they also need to build relationships with people.
Jodie Gillary, Head of Brand Activation at Kantar UK
It's great that budgets are holding but for me the more interesting question is: how is AI driving these decisions? LLMs are upending how consumers discover and buy from brands, and getting return on marketing spend will rely on winning with both people and machines. Blindly going 'social first' won't cut it anymore - we know LLMs don't tend to source from TikTok or Instagram. Earned media, meanwhile, is really moving the needle on brand strength, reaching man and machine by drumming up conversation and positive reviews. We're seeing marketers starting to get to grips with what AI means for their brand building strategies, but the reality is that this will look different for each business, depending on the brand, its target market and what LLMs they're using, so it's important to get the right intel to make sure investment is really delivering effectively.
Hamza Kourimate, CMO at Dailymotion Advertising
The Bellwether reflects something we're seeing across video more broadly. Even as businesses become more cautious about the months ahead, they aren’t stepping away from video. Albeit, teams are now much more selective about where and how they invest.
Crucially, video is no longer consumed in channels. It's one continuous viewing journey. Think about the World Cup. Someone might watch the match live on TV, catch the highlights later on Dailymotion and then continue the conversation through clips on TikTok. Different platforms, different formats, one audience moving through a connected experience. We're seeing advertisers increasingly focus on understanding those audience journeys through connected viewing data, as that's how they unlock incremental reach and avoid unnecessary duplication.
Pressure is mounting to demonstrate the impact of every media pound spent, and it’s important marketers have a clearer picture of how target audiences actually consume video. The brands that can connect those viewing journeys and understand where attention is moving will be miles ahead in building long-term brand preference while making every investment work harder.
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