UK businesses have revised marketing budgets upwards at the strongest rate in more than two years, with PR recording its biggest uplift in the IPA Bellwether survey’s history and every main media channel returning to growth.
The Q3 2026 report offers encouragement for agencies heading into the crucial Christmas trading period, with Manchester agency leader Sue Benson describing it as the most optimistic Bellwether she has read in years.
Just over a quarter of companies surveyed increased their marketing budgets during the quarter, compared with 11.3% that cut them. The resulting net balance of +14.3%, up from +6.9% in Q2, was the highest since Q2 2024 and marked a third consecutive quarterly increase.
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All seven marketing categories recorded positive net balances, while respondents said successful campaigns were helping unlock further investment. Budgets were also being increased to support product launches, generate leads and improve visibility through social media.
The findings build on the recovery reported in July’s Bellwether, when events and video led spending despite weakening confidence.
Sue Benson, CEO of Manchester’s The Behaviours Agency and IPA chair for England and Wales, said: “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.”
PR sets record as media recovery broadens
PR led the category rankings, with its net balance jumping from +1.4% to a survey record of +15.3%. Upward revisions have now continued for 13 consecutive quarters.
Events followed at +15.1%, up from +11.0%, extending its run of positive readings to 19 quarters. Sales promotion recorded the second-strongest reading in its history at +13.1%, compared with +0.9% previously.
The figures measure the balance of companies increasing budgets against those cutting them, rather than the percentage increase in money spent.
Main media advertising recorded its strongest upward revision since Q2 2017, with a net balance of +9.8%, up from +1.5%.
For the first time since the survey began tracking its five main media subcategories in Q1 2020, all five recorded increases together.
Other online advertising led at +17.2%, followed by video at +9.8% and out-of-home at +3.6%. Audio returned to growth for the first time in three-and-a-half years, while published brands recorded their first positive reading in three years.
Direct marketing and market research both registered net balances of +5.2%, with research returning to growth after six consecutive quarters of cuts.
Warning over short-term promotions
Despite the improvement, the IPA warned marketers against allowing immediate sales targets to overshadow longer-term brand investment.
Paul Bainsfair, IPA director general, said: “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.
“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.”
The report also identified AI as both an opportunity and a threat. Respondents highlighted its potential to improve processes and customer engagement, alongside risks to jobs, skills and businesses’ ability to stand out.
Some saw opportunities to differentiate through authentic, human-centred experiences that build trust and demonstrate expertise.
Confidence remains fragile
The budget recovery has yet to translate into positive business sentiment.
The net balance measuring confidence in companies’ own financial prospects improved from -9.6% to -2.7%, while industry-wide confidence rose from -25.1% to -20.3%.
S&P Global Market Intelligence raised its forecast for real UK advertising spending growth this year from 2.1% to 2.8%. However, it cut its 2027 forecast from 2.3% to 1.3%, underlining the uncertainty beyond the current recovery.
The Bellwether report is compiled by S&P Global on behalf of the IPA, drawing on a panel of around 300 UK companies.
The report was welcomed by industry insiders. Lucy Baird, Director at Lucky North said: “The latest IPA Bellwether report is encouraging news for the PR industry, with budgets seeing their strongest upward revision in nine quarters.
“While we’re not necessarily seeing a significant increase in PR spend across the board, there is a growing divide between businesses that still view PR as a discretionary cost and those recognising its role in building long-term visibility and reputation.
“That distinction is becoming increasingly important as the way people discover and research brands changes. Audiences are turning to AI tools for recommendations and information, and these platforms draw heavily on independent, authoritative sources such as news publications and media websites.
“The businesses investing in sustained media coverage, telling their story through trusted third-party sources will be better placed to remain visible as search continues to evolve.”
Dave Whitrick, Head of SEO at Engage, said: “These latest figures point to growing confidence in marketing investment, creating opportunities for businesses to strengthen their visibility and stand out in a competitive digital landscape.
“The increased investment in PR reflects what we’re seeing as a wider shift in how brands are thinking about visibility. As AI-driven search becomes more established, we’ve seen growing recognition that digital PR has a role beyond earning backlinks.
“For businesses, the priority should be to bring SEO and digital PR closer together, securing credible coverage and relevant mentions across trusted publications to build authority, strengthen online visibility and increase the chances of being referenced in AI-generated responses.”
