After a shaky start to the year caused by tariff-related anxiety, a level of confidence is returning to the UK ad market, as reflected in marketing investment for the second and third quarters of 2025. The latest edition of the IPA Bellwether Report found a net balance of +3.6 percent of marketers increasing their spend during Q3, marking the second consecutive quarter of budget expansion.
The net balance is derived from the proportion of marketers who increased their budgets during the quarter, minus those that decreased their budgets. The figure is down slightly on the previous quarter’s net balance of +5.5 percent, but that increase came from the lower base of spending in Q1, when a net balance of -4.8 percent cut their marketing budgets in response to trade uncertainty.
And the upward revision in Q3 represents a marked improvement on the same quarter last year, when the net balance of marketers upping their spend was 0 percent – although this followed a spike in Q2 2024 when 15.9 percent of respondents increased their marketing budgets. Nevertheless the Q3 results are notable for remaining positive during a tentative quarter, according to the IPA.
“Q3 results in recent years have shown a note of caution, perhaps unsurprisingly, given their timing just ahead of the Autumn Budget,” commented Paul Bainsfair, IPA Director General. “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,” he added. “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.”
Video bounces back
That said, main media budgets were actually unchanged during the quarter, according to the survey results, with the net balance of marketers increasing main media spend sitting at 0 percent for a second consecutive quarter. Instead the rise in spending came from events (+10.9 percent), direct marketing (+9.7 percent) and PR (+2.5 percent). Panellists reported that growth in these categories stemmed from the reallocation of resources to methods that enable brand managers to be more targeted and focused on lead generation and customer engagement.
However, individual media channels reflected a mixed environment for budget allocation. Video saw the highest growth, with net +6.7 percent of marketers increasing their spend, returning the channel to growth after three quarters of flat or downward revisions. Other online categories were up by +2.1 percent during the quarter. But these expansions in media budgets were offset by reductions across published brands (-6.2 percent), audio (-13.0 percent) and out-of-home (-15.2 percent).
“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 percent net balance,” said Amy Lawrence, Head of Digital, EMEA at Publicis Imagine and Chair of the IPA Digital Marketing Group. “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.”
Optimism returns to company prospects
The Bellwether report also monitors marketers’ attitudes towards their own company’s financial prospects compared to the previous quarter. The net balance of optimistic responses was +2.9 percent in Q3, and while the IPA acknowledged that “the proportion of firms feeling upbeat was only minimal”, the report noted that this marks the first time the outlook has entered positive territory since Q2 2024.
Industry-wide financial prospects were more negative however, with a net balance of -24.0 percent indicating a heightened level of pessimism regarding the financial outlook of the industry overall.
“Encouragingly, company-level financial optimism has returned for the first time since mid-2024, despite uncertainty on policy as we await the Autumn Budget,” said Alex Uprichard, Managing Director of IMA and IPA City Head for Leeds, Yorkshire and Humberside. “This momentum could signal more confident budget planning and decisive marketing strategies, supported by those of us that help clients stay both accountable and adaptive.”
“With the clear shift towards activity that delivers measurable impact, evidence-led planning from agencies is essential,” she added. “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.”
All eyes on the Autumn Budget
Looking towards the rest of the year, GDP growth forecasts remain subdued, with the IPA citing “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.”
This puts 2025 ad spend forecasts at a “sluggish” 0.6 percent, according to the report, reflecting “the challenging UK business climate, with companies constrained by high payroll expenses, domestic policy and geopolitical uncertainty, inflationary pressures and elevated borrowing costs.” And with these challenges expected to persist into next year, the Bellwether has downgraded its 2026 ad spend forecast to 1.2 percent, from a previous projection of 1.6 percent.
But there are brighter signs for 2027 and 2028, driven by softer inflation expected in the UK, which should support increases in ad spend in real terms. Ad spend growth forecasts for the coming years are therefore unchanged at 2.1 percent in 2027 and 2028.
“Clients still seem to be mindful of external economic pressures which in turn is impacting budgets,” commented Kerry McDonald, CEO of Orchard, an integrated marketing agency. “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.”
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