Despite marketing budgets showing strong growth, UK firms remain pessimistic over the financial outlook, the latest IPA Bellwether report reveals.
UK marketers have revised their total budgets to the highest level in more than two years, according to the Q3 2026 IPA Bellwether report.
The report, which polled marketing directors in the last three weeks of Q3, found just over a quarter (25.6%) of companies increased their marketing budgets, compared to the 11.3% that reported a reduction – equating to a net balance of 14.3%.
This is the third consecutive quarter to see budgets increase, rising from 6.9% in Q2 2026 and is the highest level since Q2 2024.
In fact, growth in marketing budgets have exceeded executives’ outlook for the current fiscal year-to-date, suggesting better performance compared to the initial projections.
All of the categories tracked in the Bellwether report recorded increases in budget growth during the last quarter. Main media advertising budgets jumped from just 1.5% in Q2 to a nine-year-high at a net balance of 9.8%.
According to the report, other online led the growth with its net balance rebounding from -5.1% to 17.2%. Video followed, going from 8.2% in Q2 to 9.8% – a two-year high; while out-of-home returned to a moderate growth from -2.5% to 3.6%.
Audio and published brands also recorded a modest growth in marketing budgets, increasing from 0% and -8/3% in Q2 to 1.1% and 0.8% in Q3, respectively. Direct marketing grew too, with figures rising from 3% to 5.2%.
Elsewhere, public relations saw the biggest uptick in budgets, going from 1.4% in Q2 to 15.3% in Q3, making it the thirteenth quarter of upward revisions. Meanwhile, events net balance rose from 11% to 15.1% in Q3.
Paul Bainsfair, director general, IPA, said: “With growth back at the top of the government’s agenda, it’s encouraging to see businesses increasing marketing investment at the strongest rate in more than two years, underlining advertising’s role as a driver of demand, competitiveness and economic prosperity.
“It’s particularly encouraging to see upward revisions across every Bellwether category, with main media recording its strongest budget uplift in nine quarters. The sharp rise in sales promotion spending is also understandable as businesses look to drive immediate results.”
Marketers remain pessimistic over wider outlook
Despite the positive outlook suggested by the figures above, UK firms remained pessimistic about the financial prospects at both the industry and company level.
The net balance of respondents predicting better financial prospects at an industry-wide level remained in negative territory at -20.3% – a slight improvement from the previous quarter when the figure stood at -25.1%. At the company-level, marketers were slightly more upbeat about their financial prospects, with a net balance of -2.7%, up from -9.6% in Q2.
The S&P Global Market Intelligence Bellwether has revised its forecast for adspend in 2026 to 2.8% growth – up from 2.1% in Q2. However, growth for 2027 has been revised down to 1.3% from 2.3%.
The downward trend comes as a result of continued US-Iran tensions, coupled with high fuel and energy prices, which is expected to keep inflation above the Bank of England’s 2% target.
Nevertheless, the UK GDP forecast has been raised to 1.2% for 2026 since the Q2 Bellwether report, when it stood at 0.6%. The upgrade was down to stronger than expected growth in GDP in the first of the year, largely driven by the FIFA World Cup, tech investments and the heatwave.
And adspend is predicted to rebound in 2028 at 2.4%.
Bainsfair added: “But while promotions have their place, marketers should be wary of becoming hooked on short-term activation. Recent evidence suggests that over-reliance on promotions can erode long-term value.
“In uncertain times, the most successful businesses are those that balance demand capture with demand creation, recognising that an excessive focus on today’s sales can come at the expense of tomorrow’s growth.”
