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UK marketing budgets slowly return to health
The latest figures from the IPA Bellwether report see marketing budgets revised upward following a cautious H1.
Georgie Moreton
Deputy Editor, BITE CreativebriefFor the second quarter in a row, UK companies have revised their marketing budgets upwards, according to the latest IPA Bellwether Report.
“Even in a tough economic climate, businesses clearly continue to recognise the value of advertising,” says Paul Bainsfair, IPA Director General.
According to data from the report released today (16th October), 22.3% of panellists reported an increase in their marketing expenditure in the third quarter of the year. Budgets are in positive territory once again, with a net balance of +3.6% of UK companies revising their marketing budgets upwards.
The figure is a slight decline on the +5.5 companies that reported growth in Q2, but a stark improvement on Q1’s -4.8% net balance.
“Q3 results in recent years have shown a note of caution, perhaps unsurprisingly, given their timing just ahead of the Autumn Budget. That said, it’s encouraging to see the net balance remain in positive territory,” added Bainsfair.
Reallocation of spend
Across categories, Bellwether reveals a reallocation of spend focusing on more targeted activities, lead generation and customer engagement. Growth continues to be led by events (+10.9%) and direct marketing (+9.7%). As brands embrace a ‘doing more with less’ mindset, a focus on earned media has seen PR grow 2.5%.
Main media budgets have seen no change at 0.0%, with brands hesitant to spend on big-ticket marketing. Published brands, audio and out-of-home all saw recorded further reductions, with net balances (-6.2%, -13.0% and -15.2% respectively) falling in all instances (from -4.8%, -6.3% and -8.9%, respectively).
“As budgets grow, it’s vital we don’t fall into the trap of short-termism and that we continue to invest in big, brand building activity. We know that the most effective brands are those that build emotional connections and invest in long-term brand equity. Creativity must remain at the heart of what we do, with technology serving as the amplifier, not the substitute, for powerful, resonant ideas,” says Karen Martin, IPA President and CEO BBH London.
Shining a ray of hope on the prospect of more long-term investments, sales promotions budgets were reduced for the first time in two years, falling to -0.9% from +9.4% in Q2. Other categories that saw decline include market research budgets (-6.8%) and the ‘other’ segment which encompasses marketing activities not already accounted for (-12.1%).
Reasons to be (cautiously) cheerful
Optimism is slowly being restored with Bellwether respondents feeling more optimistic towards their own company's financial prospects compared to the second quarter. This is the first time since Q2 2024 that the net balance posted in positive territory, with over a quarter (25.7%) of companies feeling more optimistic about their financial outlook. Less respondents (22.8%) expect a deterioration.
Despite industry-wide financial prospects remaining downbeat, the balance rose to a three-quarter high of -24.0% in Q3, from -26.2% in Q2. While the global socio-economic climate continues to leave industry on tenterhooks, it is unsurprising that the report finds a somewhat pessimistic broad financial outlook remains.
Taking into account continued uncertainty around US tariff policy and weak customer spending, S&P Global Market Intelligence revised its 2025 GDP growth forecast up a modest 0.5%, from 0.8% to 1.3%. Forecasts for 2027 and 2028 are slightly stronger than in previous years as inflation softens.
Reluctant growth expectations reflect a challenging business climate constrained by high payroll expenses, domestic policy and geopolitical uncertainty, inflationary pressures and elevated borrowing costs. Yet growth nonetheless is expected. Marketers will no doubt be looking to advertising’s golden quarter to boost spending and restore confidence, but there is no reward without risk.
“What’s particularly interesting is that new analysis of IPA data reinforces the strong link between budget and business growth,” says Bainsfair. He continues: “The message is simple: to drive meaningful results, advertisers need to think big. Big marketing budgets, broad reach and high exposure. Scale really does matter, which is why investing in big, brand-building media remains so important.”
Reasons to be cheerful
The industry weighs in on the IPA Bellwether report.
Maryam Baluch, Economist at S&P Global Market Intelligence and author of the Bellwether Report
UK marketing budgets rose further in the penultimate quarter of the year, providing further encouraging news after a soft beginning of the year. The data showed that events budgets saw the most significant increase in spend, closely followed by direct marketing, as firms prioritised face-to-face client and prospect engagement. In contrast, spending on sales promotions declined as firms favoured brand-building activities which are more supportive of long-term growth.
Most notably, the latest Bellwether data reveals renewed optimism regarding financial prospects at the company level, with respondents expressing positivity for the first time in five quarters. Despite ongoing economic challenges, this shows that businesses have adapted by seeking out new opportunities for growth.
Karen Martin, IPA President and CEO BBH London
It’s encouraging to see from the latest Bellwether that UK companies are increasing their marketing spend. As budgets grow, it’s vital we don’t fall into the trap of short-termism and that we continue to invest in big, brand building activity. We know that the most effective brands are those that build emotional connections and invest in long-term brand equity. Creativity must remain at the heart of what we do, with technology serving as the amplifier, not the substitute, for powerful, resonant ideas.
Amy Garrett, UK President, Weber Shandwick
The latest IPA Bellwether Report highlights steady but modest growth for PR budgets at +2.5%, reflecting its continued importance for brands navigating today’s challenges. PR efforts are increasingly being valued for their ability to engage specific audiences through carefully crafted messaging and strategic outreach. It’s no longer just about reputation. PR now plays a significant role in driving leads and conversions, helping businesses focus on targeted approaches like lead generation and customer engagement. In an uncertain economic climate, PR remains a trusted tool for building relationships, delivering measurable results, and driving meaningful impact.
Kerry McDonald, Chief Executive Officer, Orchard
Whilst there is still caution around spend, we are starting to see more clients discuss and commit to events, particularly activations that allow them to engage directly with the consumer.
Clients still seem to be mindful of external economic pressures which in turn is impacting budgets. Nevertheless, we are starting to see quicker decisions being made, which is increasing optimism as we look towards 2026. A business-friendly budget can only help that optimism.
Alex Uprichard, Managing Director, IMA and IPA City Head for Leeds, Yorkshire and Humberside
The latest Bellwether Report offers a broadly positive outlook, with total marketing budgets growing for a second consecutive quarter, again led by increases in events and direct marketing. Encouragingly, company level financial optimism has returned for the first time since mid-2024, despite uncertainty on policy as we await the Autumn Budget.
This momentum could signal more confident budget planning and decisive marketing strategies, supported by those of us that help clients stay both accountable and adaptive. With the clear shift towards activity that delivers measurable impact, evidence led planning from agencies is essential. In today’s climate, marrying real time agility with long term brand effectiveness will be key to driving sustained business growth and strengthening agency/client partnerships as we go forward.
Samantha Smith, MD, April Six (Mobility) and IPA City Head for Bristol, South West & Wales
It was good to see that UK marketing budgets continued to rise in Q3 2025, though growth slowed slightly (net balance +3.6% vs. +5.5% in Q2). Events and direct marketing led the charge, while sales promotions saw their first decline in two years. Company-level financial optimism returned for the first time since Q2 2024, even as industry-wide sentiment remained subdued.
Main media spend held flat again, though video rebounded (+6.7%). Whilst Brands remain cautious amid policy and economic uncertainty, they are leaning into brand-building and exploring growth via AI and new markets so with strategic guidance, creativity, and the ability to unlock new opportunities, agencies are perfectly placed to help businesses navigate change and grow with confidence.
Amy Lawrence, Head of Digital, EMEA, Publicis Imagine & Chair of the IPA Digital Marketing Group
It is heartening to see optimism from brands towards their own company financial prospects for the first time in over a year. Whilst an expansion in marketing budgets was recorded, caution around main media budgets is ongoing, although there is a positive story in video with a +6.7% net balance; this points towards a focus on brand spend which we know is critical to delivering long term performance. As we await the autumn budget and Q4 gets into full swing, it will be interesting to see how this develops; the ability to be agile remains crucial.
Jodie Gillary, Head of Brand Activation at Kantar UK
The nights might be drawing in but there are some green shoots of positivity in this Bellwether report with a net increase in expenditure. If marketers really want to make the most of this boost, then there should be one word on their lips: difference.
UK brands tend to be pretty good at meeting people’s needs and they’re generally well-known too. The emphasis on lead generation and customer engagement in this dataset suggests that they are continuing to lean into these areas. However, they often struggle to differentiate themselves from the competition and our estimates suggest the UK’s biggest brands are leaving a whopping $10 billion in potential value on the table compared with their global peers because of gaps in long-term brand building. Difference is the key to this as it not only gives brands an edge but also enables them to charge more. Whether it’s through breaking into new categories or tapping into culture, marketers have to make sure their brand stands out from the crowd, shaking things up over and over again in a way that only they can.
Richard Exon, Founder at Joint
After another quarter of volatility in news, economics and geo-politics, the Q3 Bellwether Report is testament to the resilience of UK business leadership. Today's marketers know that companies who hold their nerve and maintain investment in marketing, R&D and innovation are setting themselves up to success, and the report reflects this.
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