UK marketing budgets revised up to highest level in nearly two years

The latest survey, which was in field between 2-24 March 2026, reveals that a net balance of +7.3% of respondents revised their total marketing spend upwards in Q1, with 26.8% of panellists reporting an increase in marketing spend against 19.5% of the survey panel that recorded a reduction. This is up noticeably from a flatline net balance of 0.0% in Q4 2025.

Growth or decline by category in Q1 2026

Events emerged as the leading category for greater marketing investment, outperforming all other segments by a significant margin. In Q1, events recorded a net balance of +14.7%, a substantial increase from last quarter’s +1.4%.

Bellwether panellists also ramped up spending on public relations, The respective net balance rose to +6.0% (up from +3.5% in Q4 2025), marking the highest figure in five quarters.

There was also a renewed rise in budgets for main media advertising in Q1, following no change in each of the prior three quarters. The net balance climbed to +4.5%, marking its strongest upward revision since Q3 2023. Breaking out this main media category revealed that budgets were increased in two of the five tracked categories: other online advertising and video, with both posting a net balance of +5.7%. However, while the net balance for other online advertising fell from the last quarter (+13.2%), the net balance for video marketing spend rebounded from -5.0% in the previous quarter. Elsewhere, marketing budgets for audio, published brands, and out-of-home marketing continued to decline, with net balances of -3.4%, -8.5%, and -11.3%, respectively. Compared to the previous quarter, audio marketing budgets dropped less sharply (Q4: -10.2%) alongside out-of-home spending (Q4: -17.6%), but budgets for published brands saw a steeper decline (Q4: -6.5%).

Direct marketing and sales promotions both saw expenditure increase over the quarter, with net balances rising from -4.3% to +3.6% and 0.0% to +2.7%, respectively.

Reductions in marketing spend were confined to market research and other marketing expenditure. The net balance for market research fell from -4.0% to a four-quarter low of -8.5%. Meanwhile, the net balance for ‘Other’ marketing improved from -12.8% to -8.9%.

Budget plans for 2026/2027

Budget plans for the 2026/27 financial year suggest that marketing executives are slightly more optimistic towards spending prospects than initial data indicated, with the net balance revised up from +1.7% in Q4 2025 to +3.0% in the opening quarter of the year. Underlying figures show that around 28.7% of companies expect their marketing budgets to increase over the coming year, more than the 25.6% anticipating reductions.

Company-own financial prospects turn upbeat

According to the latest survey, 28.6% of respondents reported greater optimism about their company’s financial outlook compared to three months ago, marginally outpacing the 28.0% who expressed pessimism. This resulted in a net balance of +0.6%. While only marginally positive, this figure represents a significant improvement from Q4 2025’s recent low of -19.0%.

At the broader industry level, sentiment remained downbeat, a trend persisting since the final quarter of 2021. Around 35.3% of marketing executives reported a pessimistic view of industry prospects, more than double the 14.4% who felt more optimistic. The resulting net balance of -21.0% (up from -30.1% in Q4) was well below the series average, yet it marks a five-quarter high, signalling that while industry-wide confidence is still fragile, the mood has improved.

GDP forecasts downgraded

UK growth forecasts were cut at the end of the first quarter, with S&P Global Market Intelligence projecting GDP to expand by 0.5% on an annual basis in 2026, lower than the 0.8% expansion anticipated in the previous quarter. The downward revision was largely due to the impact of the war in the Middle East. Consumer spending growth forecasts were also revised lower to 0.6% (0.8% previously), and more concerningly business investment is set to stagnate. The outlook for 2026 has become increasingly uncertain due to ongoing geopolitical uncertainty, but a recovery is expected in 2027 (1.4% GDP growth) and into 2028 (1.6% GDP growth). Nevertheless, forecasts for the coming years have also been revised down compared to the start of 2026.

In contrast, the outlook for advertising spend has strengthened notably. According to the latest S&P Global adspend forecast, growth for 2026 has been upwardly revised to 2.5%, compared to the previous forecast of 1.5%. This upgrade reflects increased optimism among marketers and a willingness to invest in brand-building and customer engagement, even as the wider economy remains subdued. Momentum is expected to build further in subsequent years, with adspend growth projected to hit 2.7% in 2027 and 2.9% in 2028.

Commenting on the Q1 2026 IPA Bellwether Report:

Says Paul Bainsfair, Director General, IPA:

“These latest Bellwether results defy wider geopolitical uncertainty and signal a bullish start to the year for UK marketing investment. Looking at the detail, it is pleasing to see that budgets for main media are up. The evidence is being heeded, even in tougher conditions, cutting back on advertising risks long-term damage. It is therefore welcome news that UK companies are holding their nerve and investing to stay front of consumers’ minds, strengthen their brands and drive future growth.”

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

“After stagnating at the end of 2025, total marketing budgets returned to growth in Q1, marking a positive start to the year. This rebound occurred despite a surge in price pressures, driven by rising energy costs, which have cast a shadow of caution and concern over the broader economy. Nevertheless, marketing executives have demonstrated resilience, concentrating efforts on revenue-generating sectors and prioritising targeted, client-driven campaigns - including more events - to better position their organisations amid ongoing headwinds and uncertainty.

Amy Garrett, UK President, Weber Shandwick:

“The continued growth in Public Relations budgets – up for an 11th consecutive quarter - really emphasises the increasing importance of earned-first thinking in a complex media environment. As audiences become harder to reach and trust more fragile, brands are investing in ideas that are designed to travel. Fuelled by cultural insight and amplified through media networks, these ideas deliver impact well beyond the initial media moment.”

Bill Doris, VP Analytics Lead, EMEA, WPP Media & IPA Chair of the IPA Media Research Advisory Group:

"While the broader industry shows growth, Market Research is navigating a bit of a dry spell, facing the fifth consecutive quarter of budget cuts and the net balance reaching a yearly low of -8.5%. Looking ahead to the 2026/27 financial year, the outlook remains bleak, with a net balance of -13.7% of marketing executives expecting further reductions.

Amy Lawrence, Head of Digital, EMEA, Publicis Imagine & Chair of the IPA Digital Marketing Group:

“After the caution seen in previous quarters, it is heartening to see optimism both in the Q1 numbers, and also for the FY 26/27 period. The renewed confidence in Video spend and the slight slowdown in Other Online spend suggests marketers are moving beyond short-term performance fixes, which often come with tougher economic times, towards more balanced, brand-building investment, giving the impression of a reset in priorities. It will be interesting to see how this continues to play out amidst ongoing global economic turmoil.”

Sue Benson, Managing Director, The Behaviours Agency and IPA Chair for England & Wales:

“At last some positive news, but what I found most interesting was the commentary from panellists around opportunity and threats. It’s the both the macro and global impacts causing concern to UK companies and whilst that’s clearly not new news in itself, what it does make you consider is how much sharper, creative and relevant brands need to be to remain resilient.

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

“The Bellwether Report for Q4 indicated some green shoots in terms of improved perceptions of wider economic factors. Today’s Q1 Bellwether Report indicates some of these green shoots translating into marketing. Main media advertising budgets are showing their strongest upward revision for over two years. What’s more, despite the continuing global uncertainty, respondents expressed more optimism about their company’s own financial outlook and an increasing appetite to invest in brand building.

“It’s no surprise that in terms of opportunities, automation and AI were frequently cited as forces for good. For example, to sharpen customer engagement and generate better insights. It’s important that we all embrace technology and its potential to fuel this renewed optimism for growth and investment. Alongside this, it’s also important to champion the role for our industry’s key point of difference – its creative superpowers - in meeting these ambitions.”

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

“Albeit somewhat surprising, considering the wider economic climate and with survey respondents already aware of the impact of the conflict in Iran, it’s good to see marketing budgets bouncing back strongly in Q1 after a flat end to 2025. With growth at its fastest in nearly two years being driven by events, PR, and a renewed focus on targeted, revenue-generating activity it’s an encouraging start to the year."

Gemma Longfellow, Chief People Officer, Open Partners and IPA City Head for Manchester and the North West:

“In the midst of the continual change and uncertainty that looks like it’s here to stay, the Q1 2026 IPA Bellwether Report offers cautious optimism and a helpful map to focus our efforts where they will be most effective and impactful for our clients. It also emphasises the need for leaders to be both wise and brave to navigate through this time effectively.”

Penny Took, CEO, Mediaplus Connect and IPA City Head for Birmingham and the Midlands:

"Positive growth signs at the end of 2025 were confirmed in Q1 2026, with main media budgets showing a net balance of 4.5% despite a fairly stagnant economy. Full-year ad spend is now forecast to grow 2.5%, up from the earlier forecast of 1.5%. With economic growth predicted at just 0.5%, marketers appear to be following the long-held view that cutting budgets in tough times is a false economy."