Marketing budgets bounced back in Q2, according to the latest research from the IPA Bellwether Report. The rebound comes as marketing budgets were slashed for the first time in four years in the opening quarter of 2025,

While summer might not be all sunshine and rainbows, the report paints a more positive picture than previous predictions. The uptick in advertising budgets was the most significant since Q2 2024, with a net balance of +5.5% of panellists reporting a rise in their total marketing budgets for the second quarter of 2025. This is a notable improvement from -4.8% in the prior quarter, with 22.7% of panellists registering a rise in Q2, compared to 17.2% reporting a reduction in their budgets. 

Short-term gains

After a cautious Q1, the breakdown of Q2 spend showed that while marketers exhibited resilience and increased budgets, categories that experienced the most growth were the ones that drove more short-term gains, while main media spend flatlined.

Sales promotions and direct marketing saw the greatest rise from +8.0% in Q1 to +9.4% in Q2 and from +9.0% in Q1 to +9.1% in Q2. Budgets for the main media category remained unchanged on the quarter at 0.0%, -6.7% previously.

“A closer look at this quarter's findings reveals that the increase in spend is largely driven by tactical approaches,” says Paul Bainsfair, IPA Director General. 

He continues: “While agility is crucial in today’s fast-paced market, it’s essential that short-term activation efforts are balanced with sustained investment in long-term, emotionally-driven brand-building strategies. By striking this balance, companies can position themselves not only for immediate success but also for enduring growth in an increasingly competitive landscape."

Marketing budgets were raised for events and public relations (from +5.4% in Q1 to +3.9% in Q2 and +3.4% in Q1 to +2.7% in Q2). Within main media, growth in marketing budgets was limited to other online advertising channels, with the net balance rising from 0.7% to +2.2%, while video marketing spend was stable (net balance up from -1.0%). 

All remaining categories recorded quarterly downward revisions, with out-of-home leading the decline at a net balance of -8.9% (up from -18.9 previously). 

Looking long-term

S&P Global Market Intelligence’s expectations for the remainder of 2025 remain subdued. The UK economy has already faced several challenges in H1 in the form of heightened inflation and the repercussions of Labour’s budget on businesses. 

Yet, industry optimism is increasing, or at least Bellwether respondents are notably less pessimistic when evaluating financial prospects at both the company and industry level than at the start of the year. 21.9% of panel members expressed increased optimism compared to three months ago, when 24.9% indicated pessimism.

For the remainder of the year, inflation is expected to remain above the central bank's 2% target throughout the year, which poses additional risks to growth. Ongoing geopolitical tensions in the Middle East continue to cause uncertainty, while the impact of US tariffs remains to be seen. 

GDP is projected to grow by 0.8% this year, slightly higher than the 0.6% forecasted in the previous quarter. Forecasts for adspend in 2025 have been revised down from 1.3% to 0.7%, but 2026 is expected to see a recovery with adspend growth doubling to 1.6%. 

Looking to 2025 and beyond, predictions continue to grow marginally. Maintaining resilience remains essential to growth. 

The industry weighs in on the IPA Bellwether:

Paul Bainsfair, IPA Director General

Looking at the broader picture, we welcome the news that UK companies have revised their marketing spend upwards in Q2. Advertising is a fundamental part of the Creative Industries, one of the eight sectors prioritised by the Industrial Strategy as key to the UK's growth. This uptick in marketing investment not only contributes to the overall health of the UK economy but, for businesses with the foresight to invest strategically, it can also lead to significant growth and competitive advantage.

However, a closer look at this quarter's findings reveals that the increase in spend is largely driven by tactical approaches. While agility is crucial in today’s fast-paced market, it’s essential that short-term activation efforts are balanced with sustained investment in long-term, emotionally-driven brand-building strategies. By striking this balance, companies can position themselves not only for immediate success but also for enduring growth in an increasingly competitive landscape.

Maryam Baluch, Economist at S&P Global Market Intelligence and author of the Bellwether Report

2025 Q2 was a more upbeat month for UK marketing budgeteers, with spending rising markedly, reversing the previous quarter's decline - the first in four years. This rebound reflects businesses' renewed commitment to growing their brands, even amid ongoing economic challenges.

Notably, budgets for sales promotions and direct marketing saw the biggest gains, indicating that companies are balancing short-term revenue and cashflow gains – likely necessitated by the intensification of global headwinds – with strategic and targeted marketing initiatives to help drive longer-term success. Less pronounced growth in events and PR budgets highlight a comprehensive yet measured approach.

Furthermore, reduced pessimism regarding financial prospects at both the company and industry levels suggests that businesses are becoming more acclimatised to current market conditions.

Jim Kelly, Deputy MD Head of Planning, Story and IPA Chair for Scotland

I’m encouraged that there’s been some rebound in marketing budgets despite the significant challenges facing businesses on both the domestic and global fronts. In this context, boosts in spending for any category need to be welcomed. So increased investment in direct marketing, sales promotion and events recognise the importance of engaging prospects and customers.

However, any confidence remains fragile. Whilst there’s slightly less pessimism around financial prospects at both company and industry level this quarter, the continuing economic uncertainty has seen S&P Global revise down their adspend forecast to just +0.7% for 2025. We need to see a sharp reversal in this trend to move beyond anything other than very cautious optimism.

James Ray, CEO, Armadillo and IPA Chair for England & Wales

It’s great to see a positive shift in this quarter’s report, with marketing budgets expanding despite (or even because of) ongoing uncertainty and flux in the general economic picture. As a life-long direct marketer, it’s especially encouraging to see a strong uptick in direct marketing investment, as tech and AI capabilities continue to accelerate. While this might reflect a degree of short-term sales chasing, I believe it also reflects businesses backing the growing potential of one-to-one channels to support brand-building and long-term customer value.

Sue Benson, Managing Director, The Behaviours Agency and IPA City Head for Manchester & North West

This quarter’s IPA Bellwether Report brings a welcome dose of optimism, and the rebound in marketing budgets is a much-needed shot in the arm. It certainly reflects the resilient mindset we’re seeing in the North West. The strong growth in direct marketing and sales promotions is no surprise, as businesses continue to prioritise short-term, measurable results in a competitive market. It is heartening, however, to see main media spend finally stabilise. This suggests a renewed, if cautious, commitment to brand building, which as we all know is crucial to long term success.

Jim Rudall, Regional Director, EMEA at Intuit Mailchimp

It is encouraging to see a strong rebound in marketing budgets in Q2, as revealed by the latest IPA Bellwether Report. This is perhaps reflective of the high number of opportunities marketers have to engage with consumers as spring turns to summer. According to Mailchimp’s New Ecommerce Calendar report, there are up to 15 personal, cultural and community-driven moments to connect with audiences on a monthly basis. For May and June in particular, there is a swathe of opportunities available that will undoubtedly have driven the rise in marketing confidence and, in turn, spend. 

Major entertainment events and music festivals, for example, prompted 15% of shoppers to make purchases in the last two years. With Eurovision and Glastonbury falling alongside major sporting events such as Royal Ascot and the FIFA Club World Cup, there was no shortage of opportunities to capitalise on this in Q2. The fact that the latest IPA Bellwether Report finds budgets were raised for events suggests that marketers took this opportunity with both hands.

It is also worth commenting on the rise in sales promotions. Marketers must craft the right value proposition, but that doesn’t always mean offering hefty discounts. According to Mailchimp research, 39% of shoppers worldwide are overwhelmed by the volume of sales and promotions, and 7 in 10 UK shoppers believe discounts around retail moments are often exaggerated. Instead, loyalty rewards can be particularly impactful for UK consumers: 43% were influenced by loyalty reward perks to make a purchase in the last two years, well above the global average of 33%. It is something to keep in mind for the quarters to come as marketers strive to maximise ROI.

Samantha Smith, CEO, krow kinetic and IPA City Head for Bristol, South West & Wales

It was good to see UK marketing budgets rebound in Q2 2025, reversing Q1’s decline. Total budgets grew at the fastest rate in a year too, but still being driven by strong increases in sales promotions and direct marketing, suggesting the continuing need to drive revenue. Confidence improved slightly, although broader economic uncertainty persists. Events and PR saw modest gains, while main media spend stabilised. AI adoption, easing inflation, and digital marketing expansion were seen as key opportunities, despite ongoing threats from global instability, rising costs, and recruitment challenges. Financial prospects improved marginally, but employment sentiment remained cautious amid cost pressures and cautious planning, so it is still a tough world out there!

Dom Boyd, Managing Director of Insights at Kantar UK

CMOs have clearly been fighting hard in the boardroom to make the case for resilient marketing spend, but we should be careful about looking at these figures as an outright victory.  The weighting towards direct marketing and promotions is a big red flag – short-term tactics can be useful for a quick boost to sales, but they won’t generate sustainable growth on their own. 

Today’s fragmented media and consumer landscape means that growing big relies on investing in lots of ‘littles’.  Rather than putting eggs in one basket, it’s about making incremental gains through different but connected devices and channels – with the brand as the glue holding everything together.  When it comes to media strategies, for example, our data shows that campaigns with five or more channels can deliver up to three times the impact on awareness and purchase intent versus those with only two.  If brands want to really break through the consumer attention ceiling, they’ll need to carve varied routes in – and make sure all those ‘littles’ add up to being a present and relevant part of people’s lives.

Nichola Elgie, Senior Account Director, Drummond Central and IPA City Head for Newcastle and the North East

It’s positive to see the UK advertising market returning to growth, but this is largely driven by immediate, response-focused channels. Brand-building channels like OOH and radio are seeing sharp declines. While brands are adapting quickly, there's a risk in over-prioritising short-term, sales-driven tactics. The most effective results still come from distinctive, memorable ideas that endure beyond a quick promotion. Agencies must stay focused on what brands truly need: calm, strategic thinking that avoids the trap of short-termism and supports long-term brand growth.

Paul Wright, Head of EMEA Sales, Uber Advertising

Even as economic uncertainty continues, one thing’s clear: marketers will be looking to drive efficiency in their budget usage. Therefore, two areas to focus on are standout creativity and media budget utilisation - targeting people, not devices. The latest IPA Bellwether reflects this, with marketers doubling down on engaging visual content to stand out in a noisy media landscape. 

Our research with Lumen has shown that when you pair rich first-party data with seamless, relevant creative, this can turn fleeting moments of engagement into sustained interaction and action. As the media landscape continues to evolve, those who focus on holding consumer attention through authentic, context-driven campaigns will be best positioned to deliver meaningful business outcomes.

Justin Reid, Senior Director of Global Partnerships Solutions at Tripadvisor

The latest IPA Bellwether report shows a welcome renewal of confidence, with marketing budgets rising and reversing the decline of the previous quarter. This rebound creates an exciting opportunity for brands to think more strategically about how they connect with audiences in meaningful and impactful ways.

Now is the time for non-endemic brands to use this budget optimism to collaborate with the right partners and meet consumers where they are, whether through platforms, experiences, or communities that resonate. Understanding consumers means looking beyond age or generation to the life stages that shape their motivations and behaviours.

For instance, college students often seek adventure and memorable experiences, while newly engaged or married couples prioritise unique, milestone-worthy moments. Add to this that retirees tend to travel more slowly, valuing comfort and convenience while managing health considerations, and there’s a mix of priorities to contend with. By recognising these unique differences, brands can tailor their strategies more effectively, creating deeper and more meaningful connections that resonate with each consumer’s current needs and aspirations.

Brands that embrace these insights by activating creative partnerships and cultural relevance will be best placed to capture attention and build lasting connections. Delivering experiences worth sharing, they can turn the excitement of rising marketing budgets into meaningful growth and deeper consumer engagement.