UK companies have revised their marketing budgets upwards at the strongest rate in nine quarters, driven by an improving economic backdrop and resilient consumer spending.
According to the Q3 2026 IPA Bellwether Report, 14.3% of surveyed businesses expanded their marketing spend in the third quarter. More than a quarter (25.6%) increased their budgets, compared to just 11.3% that reported cuts, marking the third consecutive quarter of growth and the highest net revision since Q2 2024.
The upbeat findings mark a sharp contrast to earlier expectations for the 2026/27 financial year, when initial forecasts pointed to a modest net balance of +3.0% growth. Year-to-date marketing performance has comfortably outstripped those initial projections.
Growth across all categories
In a rare outcome for the survey, every single Bellwether category recorded upward budget revisions during Q3.
Public relations led the rankings with its net balance jumping from +1.4% in Q2 to a series high of +15.3%, extending its streak of upward revisions to 13 consecutive quarters. Events, which previously held top spot, recorded a nine-quarter high net balance of +15.1%.
Sales promotion budgets also experienced a sharp surge, rising to a net balance of +13.1% from +0.9% in the prior quarter, coming close to the record high set in Q2 2023.
Main media advertising saw a strong uplift, climbing from +1.5% to +9.8%, its highest reading in nine years. Crucially, growth was broad-based across all five main media subcategories for the first time since tracking began in 2020:
- Other online rebounded strongly to lead main media at +17.2% (up from -5.1%).
- Video reached a two-year high at +9.8% (up from +8.2%).
- Out-of-home returned to positive territory at +3.6% (up from -2.5%), marking its only positive reading in series history.
- Audio and published brands turned positive, reaching +1.1% and +0.8% respectively.
Elsewhere, direct marketing (+5.2%) and market research (+5.2%) both reported gains, with market research logging its first positive reading in seven quarters. The general ‘other’ category recorded +1.0%, reversing a sharp -10.8% drop in Q2.
Economic upgrades lift confidence
The strong performance follows upgraded economic forecasts for the UK. S&P Global Market Intelligence raised its 2026 UK GDP growth forecast to 1.2% (up from 0.6%), pointing to stronger-than-expected first-half activity supported by summer sporting events, warm weather, and tech investment.
As a result, full-year adspend growth for 2026 was upgraded from 2.1% to 2.8%.
While financial prospects at both industry and company levels remain cautious, sentiment turned markedly less negative in Q3. Company-own financial sentiment rose from -9.6% to -2.7%, while industry-wide prospects improved from -25.1% to -20.3%, the least pessimistic figure in nearly two years.
IPA Director General Paul Bainsfair welcomed the results, highlighting advertising’s role in economic recovery, while cautioning brands against over-relying on short-term promotions.
“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,” Bainsfair said.
“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. 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.”
