UK companies revised their budgets up for a second consecutive quarter in Q3 2025, according to the latest IPA Bellwether Report.
A healthy 22.3% of panellists reported an increase in their marketing expenditure in the third quarter of the year, while those indicating a reduction was lower at 18.7%. This resulted in a net balance of +3.6%, a slight decline from +5.5% recorded in the previous quarter, and well below the +18.4% net balance of companies that anticipated growth for the 2025/26 financial year, Nevertheless, this positive figure marked back-to-back quarters of total marketing budget expansion and was a notable contrast to Q1's -4.8% net balance.
The breakdown showed that budgets were raised the most for events and direct marketing, with respective net balances rising from +3.9% and +9.1% to +10.9% and +9.7%, respectively. PR was the final growth segment, with its net balance holding broadly unchanged +2.5% in Q3 (versus +2.7% in Q2). According to panellists, growth in these modes of marketing reflected the reallocation of resources to methods which enable brand managers to be more targeted, focusing on lead generation and customer engagement.
For a second consecutive quarter, main media budgets saw no change, with the net balance coming in again at 0.0%. There was an uneven picture at the individual category level, however. While video and other online categories saw marketing budgets rise on the quarter (net balances at +6.7% and +2.1% in Q3, from 0.0% and +2.2% in Q2, respectively), the remaining three tracked areas –published brands, audio and out-of-home – recorded further reductions, with net balances (-6.2%, -13.0% and -15.2% respectively) falling in all instances (from -4.8%, -6.3% and -8.9%, respectively).
Meanwhile, sales promotions budgets were reduced for the first time in two years, with the net balance falling to -0.9%, from +9.4% in Q2. Market research and the "other" category remained in the bottom two of the rankings. A net balance of -6.8% firms cut market research budgets, only slightly less pronounced than the -7.0% net balance in Q2. The "other" segment, which covers marketing activities not already accounted for, saw its net balance fall from -8.7% in Q2 to -12.1% in Q3.
Q3 data revealed that Bellwether respondents felt more optimistic towards their own-company financial prospects compared to the second quarter. While on balance, the proportion of firms feeling upbeat was only minimal, it was the first time since Q2 2024 that the net balance posted in positive territory. Over a quarter (25.7%) of companies felt more optimistic about their financial outlook, slightly surpassing the 22.8% of respondents expecting a deterioration. This resulted in the net balance rising to +2.9%, from -3.0% in the quarter prior. While positive, company-own expectations were conservative by historical standards.
Meanwhile, firms remained downbeat towards industry-wide financial prospects. Although the net balance rose to a three-quarter high of -24.0% in Q3, from -26.2% in Q2, it still indicated a heightened level pessimism regarding the financial outlook of their industry more broadly. More than a third of respondents (33.9%) foresee an industry-wide decline, whereas only 9.9% expressed optimism.
S&P Global Market Intelligence has revised its 2025 GDP growth forecast up from 0.8% in the last Bellwether survey to 1.3%. GDP figures in the first half of the year, particularly Q2, have led to the upward revision. The economic growth forecast for next year has also been lifted to 1.1%, from 0.8%. Nevertheless, these projections remain fairly subdued overall, reflecting constraints on the economy arising from both recent and expected taxation changes, US tariff policy and subsequent headwinds for the UK industrial sector, in addition to a weak underlying trend in consumer spending.
In terms of adspend, the 2025 Bellwether forecast remains unchanged at 0.6%, well below the predicted long-term trend rate of around 2%. Sluggish growth expectations are in part a reflection of the challenging UK business climate, with companies constrained by high payroll expenses, domestic policy and geopolitical uncertainty, inflationary pressures and elevated borrowing costs. Much of these challenges are expected to persist into 2026, which has led to Bellwether downwardly revising its adspend forecast for next year to 1.2%, from 1.6% previously.
Positively, S&P Global Market Intelligence's GDP growth forecasts for 2027 and 2028 are slightly stronger than those for the previous years. Expectations of softer inflation in the UK should also support better increases in adspend in real terms. Adspend growth is forecast at 2.1% in 2027 and 2028, unchanged from the Q2 Bellwether survey.
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“Q3 results in recent years have shown a note of caution, perhaps unsurprisingly, given their timing just ahead of the Autumn Budget. That said, it’s encouraging to see the net balance remain in positive territory. Even in a tough economic climate, businesses clearly continue to recognise the value of advertising.
“What’s particularly interesting is that new analysis of IPA data reinforces the strong link between budget and business growth. The message is simple: to drive meaningful results, advertisers need to think big. Big marketing budgets, broad reach and high exposure. Scale really does matter, which is why investing in big, brand-building media remains so important.”
"UK marketing budgets rose further in the penultimate quarter of the year, providing further encouraging news after a soft beginning of the year. The data showed that events budgets saw the most significant increase in spend, closely followed by direct marketing, as firms prioritised face-to-face client and prospect engagement. In contrast, spending on sales promotions declined as firms favoured brand-building activities which are more supportive of long-term growth.
"Most notably, the latest Bellwether data reveals renewed optimism regarding financial prospects at the company level, with respondents expressing positivity for the first time in five quarters. Despite ongoing economic challenges, this shows that businesses have adapted by seeking out new opportunities for growth."
“It’s encouraging to see from the latest Bellwether that UK companies are increasing their marketing spend. As budgets grow, it’s vital we don’t fall into the trap of short-termism and that we continue to invest in big, brand building activity. We know that the most effective brands are those that build emotional connections and invest in long-term brand equity. Creativity must remain at the heart of what we do, with technology serving as the amplifier, not the substitute, for powerful, resonant ideas.”
“The latest IPA Bellwether Report highlights steady but modest growth for PR budgets at +2.5%, reflecting its continued importance for brands navigating today’s challenges. PR efforts are increasingly being valued for their ability to engage specific audiences through carefully crafted messaging and strategic outreach. It’s no longer just about reputation. PR now plays a significant role in driving leads and conversions, helping businesses focus on targeted approaches like lead generation and customer engagement. In an uncertain economic climate, PR remains a trusted tool for building relationships, delivering measurable results, and driving meaningful impact.”
“Whilst there is still caution around spend, we are starting to see more clients discuss and commit to events, particularly activations that allow them to engage directly with the consumer.
“Clients still seem to be mindful of external economic pressures which in turn is impacting budgets. Nevertheless, we are starting to see quicker decisions being made, which is increasing optimism as we look towards 2026. A business-friendly budget can only help that optimism.”
“The latest Bellwether Report offers a broadly positive outlook, with total marketing budgets growing for a second consecutive quarter, again led by increases in events and direct marketing. Encouragingly, company-level financial optimism has returned for the first time since mid-2024, despite uncertainty on policy as we await the Autumn Budget.
“This momentum could signal more confident budget planning and decisive marketing strategies, supported by those of us who help clients stay both accountable and adaptive. With the clear shift towards activity that delivers measurable impact, evidence-led planning from agencies is essential. In today’s climate, marrying real-time agility with long-term brand effectiveness will be key to driving sustained business growth and strengthening agency/client partnerships as we go forward.”
“It was good to see that UK marketing budgets continued to rise in Q3 2025, though growth slowed slightly (net balance +3.6% vs. +5.5% in Q2). Events and direct marketing led the charge, while sales promotions saw their first decline in two years. Company-level financial optimism returned for the first time since Q2 2024, even as industry-wide sentiment remained subdued.
“Main media spend held flat again, though video rebounded (+6.7%). Whilst Brands remain cautious amid policy and economic uncertainty, they are leaning into brand-building and exploring growth via AI and new markets so with strategic guidance, creativity, and the ability to unlock new opportunities, agencies are perfectly placed to help businesses navigate change and grow with confidence.”
“It is heartening to see optimism from brands towards their own company financial prospects for the first time in over a year. Whilst an expansion in marketing budgets was recorded, caution around main media budgets is ongoing, although there is a positive story in video with a +6.7% net balance; this points towards a focus on brand spend which we know is critical to delivering long term performance. As we await the autumn budget and Q4 gets into full swing, it will be interesting to see how this develops; the ability to be agile remains crucial.”
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