UK companies revise marketing budgets up to highest level in over two years

The data reveals that just over a quarter of panellists (25.6%) raised their budgets in Q3, compared with 11.3% that reported a reduction, resulting in a net balance of +14.3%. This marks a third consecutive quarter increase, with the net balance rising from +6.9% previously to its highest level since Q2 2024.

Year-to-date growth in marketing budgets has comfortably exceeded executives’ outlook for the 2026/27 financial year, indicating a stellar performance versus initial projections. The net balance of +3.0% anticipating growth this year was downbeat by historical standards, with the latest quarterly revision net balance surpassing that almost five-fold.

Growth or decline by category in Q3 2026

All seven Bellwether categories recorded marketing budget growth in Q3. Public relations led the rankings, with its net balance rising from +1.4% in Q2 to a series high of +15.3%. This extends its current run of upward revisions to 13 quarters.

Events slipped from first to second place in Q3, although its net balance rose from +11.0% in Q2 to a nine-quarter high of +15.1%.

Meanwhile, sales promotion budgets also rose sharply in the penultimate quarter of 2026. The net balance increased from +0.9% in Q2 to +13.1%, only surpassed by the record high reading of +13.4% set in Q2 2023.

Main media advertising budgets rose strongly, with the net balance climbing from +1.5% in Q2 to a nine-year high of +9.8%. For the first time since data on the five subcategories of main media were collected in Q1 2020, budget growth was broad-based. Other online led the upturn, with the net balance markedly rebounding from -5.1% to +17.2%, followed by video, which rose from +8.2% to a two-year high of +9.8%. Out-of-home returned to growth, increasing from -2.5% to +3.6%, its only positive reading in the series history. Audio and published brands recorded modest but renewed increases, rising from 0.0% and -8.3% in Q2 to +1.1% and +0.8%, respectively.

Elsewhere, direct marketing budgets rose strongly in Q3, with the net balance increasing from +3.0% in Q2 to +5.2%. Market research spending also increased. The net balance posted +5.2% — its first positive reading in seven quarters and the highest since Q4 2021.

Lastly, budgets in the other category recorded the weakest increase, with a net balance coming in at +1.0%. Nevertheless, this marked a sharp improvement from -10.8% in Q2 and the first upward revision to marketing budgets in nine years.

Crucially, revisions in all categories during the third quarter exceeded expectations set out by firms at the beginning of the 2026/27 financial year, with some also defying forecasts of budget cuts.

Sentiment towards industry-wide and own-business financial prospects less downbeat

Surveyed companies remained pessimistic about financial prospects at both the industry and company levels during the third quarter of 2026, although sentiment was less negative than last quarter.

Respondents were again more pessimistic towards industry-wide financial prospects than company-own. The industry-level net balance remained firmly in negative territory at -20.3% but improved from -25.1% in the previous quarter, its highest level in nearly two years. More than a third of firms (34.6%) were downbeat, over twice the 14.3% that were optimistic.

At the company level, the net balance improved from -9.6% in Q2 to -2.7%. Bearish respondents accounted for 27.3%, slightly more than the 24.6% that were bullish.

UK GDP forecasts upgraded as economy exceeds expectations

The UK GDP growth forecast for 2026 has been raised since the previous Bellwether report to 1.2%, from 0.6%. S&P Global Market Intelligence attributed the upgrades to stronger-than-expected GDP growth in the first half of 2026, supported by the FIFA World Cup, hot weather and tech-related investment. However, the lack of a lasting US–Iran peace deal and high fuel prices remain headwinds.

High energy costs are expected to keep inflation above the Bank of England’s 2.0% inflation target and will weigh on household purchasing power. Nevertheless, consumer spending growth has shown resilience in 2026, leading the growth forecast to rise from 0.5% to 1.2% for 2026.

The S&P Global Market Intelligence Bellwether adspend forecast for 2026 has subsequently improved to 2.8%, from 2.1% in Q2. Growth for 2027 has been revised down from 2.3% to 1.3%, although expectations for 2028 (2.4%) signal a rebound.

Commenting on the Q3 IPA Bellwether Report

Says Paul Bainsfair, Director General, IPA:

"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. 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."

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

“With the UK economy beating expectations so far in 2026, it’s unsurprising to see businesses showing a strong willingness to lift marketing spend. The latest Bellwether data showed a substantial rise in total marketing budgets during the third quarter, with several underlying categories recording exceptionally strong upward revisions. In all cases, quarterly budget growth exceeded expectations set earlier in the year, highlighting the breadth of the improvement.”

Bhavin Balvantrai, Chief Market Analyst, Omnicom Media:

“UK advertising confidence continues to show resilience in the face of cumulative headwinds, with a strong upgrade to main media budget net balances. With all five sub-channels increasing for the first time since the data was collected, it’s encouraging to see that budgets aren’t being reallocated from one media to another, rather that overall investment is increasing. It is great to see panellists point to advertising effectiveness as a key rationale for continuing to support growth in media. With the autumn budget on the horizon, we hope to see the momentum this quarter protect advertising investment into 2027.”

Brian Scott, Director and Co-Owner, Navigator Blue and IPA Chair for Northern Ireland:

“The latest IPA Bellwether Report provides some encouragement, with revisions to marketing budgets recording their strongest quarterly growth in over two years. Particularly positive and encouraging for Northern Ireland’s integrated agency sector is the improved investment in main media alongside strong growth in PR and events. While purely anecdotal, it’s notable too that actual campaign results are helping stimulate further investment, reinforcing the value of effective marketing.

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

“This is the most optimistic IPA Bellwether Report I’ve read in years. Despite the challenges across many UK agencies, we now have an economic backdrop that is both helpful and hopeful. As we move into the golden quarter for many of our clients, this should make ongoing investment conversations a little bit easier.

“We also look forward to the battle of the Christmas ads, an annual celebration of what we do fabulously as an industry: creativity.”

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

“As the days get shorter, it’s great that the latest Bellwether Report brings some rays of light. With panellists indicating that positive results for existing campaigns had attracted greater investment, it does feel like success has bred confidence and secured sustained investment. Whilst caution remains in terms of confidence at company and industry level, it’s a big win that the recovery in budgets isn’t confined to shorter-term, performance-led activity." 

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

“Against a backdrop of improving economic confidence, it is encouraging to see marketers’ increasing investment in channels that support longer-term growth. Main media advertising recorded its strongest uplift in nine years, with particularly healthy growth in video and online channels. More broadly, however, the growth across all media categories suggests that businesses are looking beyond short-term activation and maintaining investment in the channels that strengthen brands and drive future business performance.”

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

“The Q3 2026 IPA Bellwether Report brings some really encouraging news for our industry. UK marketing budgets have grown for a third consecutive quarter, despite ongoing economic and geopolitical uncertainty, reaching their strongest level in more than two years. Even more positively, every marketing category saw growth, with PR, events and sales promotions leading the way. Business confidence is improving and hiring expectations have turned positive too."

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

"Despite the continuing global geopolitical, economic and AI uncertainties, the Q3 uplift in budgets is testament to how our industry is working with clients to maximise the effectiveness of their investment. The positive deployment of AI is starting to have real-term effect as we all get more familiar with its benefits, both for our clients and in the workplace. It’s pleasing to see (and somewhat of a relief) that the tide seems to be turning with regard to employment prospects, with the first positive upturn in seven quarters. Without our people, we do not have an industry, the bedrock of which continues to be human creativity and ingenuity."