Bellwether reaction: Brands go for the ‘double bubble’

This week’s IPA Bellwether Report makes impressive reading for the industry, with total marketing budgets revised up to the highest level in Q3 2026 for over two years. But it is not just the usual suspects which are benefitting – every discipline has seen an increase, even those that have been in the doldrums for months.

The official line is that the upward revisions underline advertising’s role as a driver of demand, competitiveness and economic prosperity. However, as Decision Marketing discovers, businesses are increasingly seeking the “double bubble” of brand building and immediate sales. Leading industry professionals have their say…

First up is Kantar Media TGI UK & Europe managing director Rachel Macey, who believes the results signal a shift in the way brands are seeking to understand their audiences, away from traditional methods.

Macey explains: “This is an evolution rather than a retreat as the industry seeks to balance established research capabilities with AI-enabled approaches informed by synthetic data.

“While agility and cost are invaluable, that’s just one part of the story. The challenge remains to combine the credibility of robust research with the efficiency of new technologies, especially when consumer behaviour becomes trickier for AI to replicate accurately.

“Synthetic data will only ever be as good as the source data behind it and the human touch will continue to be vital. So even if the costs and scale are coming down, advertisers still need to understand what real people think in order to reach and target them effectively.”

For PDV managing director Nigel Goldthorpe the upward revisions across every Bellwether category are a positive sign, but the continued rise in direct marketing spend and the return of market research investment are key indicators.

He adds: “Together, they suggest marketers are backing data and targeting, not just channel spend. In regulated sectors like charity and financial services, where acquisition costs are scrutinised closely, this is really powerful.

“Paul Bainsfair’s warning against over-reliance on short-term promotion is also really interesting too: the businesses that benefit most from this uplift will be those pairing immediate activation with sustained, well-targeted direct marketing that builds long-term customer value.”

Meanwhile, Intuit Mailchimp EMEA partnerships lead Barbara Anthony-Okafor reckons that the headline is not simply that marketing budgets are rising; it is that businesses are becoming more deliberate about where growth will come from.

She continues: “The strongest upward revision in nine quarters, across every Bellwether category, signals renewed confidence. The increase in direct marketing investment is particularly telling, as businesses face greater pressure to demonstrate a clear connection between marketing spend, customer engagement and revenue.”

Anthony-Okafor points out that the channel will be especially important during peak season, citing Intuit Mailchimp’s “Breaking Through Peak Season Noise” research which found that while email generated the largest share of revenue between October 31 and December 31 2025, text messages delivered six times higher order rates and three times more revenue per message.

She adds: “In an increasingly fragmented environment – spanning email, text, social platforms, advertising and AI-powered discovery – isolated channel strategies will struggle to deliver their full potential.

“The businesses that perform most strongly will be those that connect their customer data, use AI and automation with clear intent, and personalise communication around genuine customer behaviour.

“The Q3 figures are encouraging, but increased investment alone will not determine success. Q4 will be less about which brands spend the most and more about which ones use their investment to create timely, relevant and connected customer experiences.”

Over at PurpleSquare, chief revenue officer Dimitri Kyprianou says the most encouraging aspect of the report is what it says about confidence.

He explains: “After a prolonged period of scrutiny over every marketing pound, businesses appear to be recognising that growth requires investment, or more specifically, that customers deserve it. Because if we don’t invest, someone else will.

“At a time when many households continue to feel financial pressure, consumers are becoming more deliberate about where they spend their money. Their expectations haven’t fallen. If anything, they’ve increased. They expect relevance, value and experiences that reflect their needs and preferences.

“For brands, that creates both a challenge and an opportunity. You can’t cut your way to deeper customer relationships. Building them requires investment in talent, technology and specialist partners that help turn customer insight into meaningful action.

“What’s particularly encouraging is the continued balance between brand and direct investment. The strongest organisations recognise these are not competing priorities. Brand builds trust and future demand; activation converts that demand into measurable outcomes.

“More budget doesn’t create growth. Better customer understanding does. The brands that win will be those that use increased investment to better understand, serve and retain their customers, rather than simply generate more activity.”

Merkle chief executive Chris Freeland, meanwhile, says that while it is great that budgets are increasing – especially as the marketing and advertising industry is often a good indicator for the wider economy – they need to be placed carefully.

He explains: “The way people shop and interact with brands is changing every day, and businesses need to make sure they are keeping pace.

“Customers expect brands to understand their needs and make their lives easier. With AI changing how consumers discover, evaluate and buy products, businesses have a narrowing window of opportunity to rethink how they serve customers.

“That means looking at the entire experience, from the first time someone discovers a brand through an AI assistant or traditional search, to the service they receive long after making a purchase.

“Increased budgets offer an opportunity to make improvements that customers will actually notice. In a market where customers have more choice than ever, giving them a reason to stay is just as important as attracting them in the first place.”

Oliver managing director of content amplification Rong Chen maintains that the most telling signal in this Bellwether is not just that budgets are up, but where the money is going.

She comments: “For the first time, all five main media channels are growing at once, alongside PR, events and promotion. The sharp rise in sales promotion reflects the pressure on businesses to deliver results now, but short-term activation can’t come at the expense of long-term brand building. The good news is that marketers increasingly don’t have to choose between the two.

“The challenge is no longer simply finding budget; it’s making that investment work across more channels, formats and markets without sacrificing consistency or speed. AI- and data-powered content production can help brands turn one strong idea into thousands of locally relevant assets. That frees up budget and creative energy for enduring brand-building work, meaning activation at scale and long-term growth no longer have to be competing priorities.”

Even so, Wingify vice-president of marketing John Hughes says that while the report is encouraging, it does not tally with what he is hearing on the ground.

He continues: “Marketing teams are still being asked to do more with less, with budgets and headcount under pressure as businesses look to AI to absorb more of the workload.

“What the report does show is that companies will invest when they can see results. AI can help teams understand customer behaviour faster, test more effectively and act on what they learn, but it should be there to make people more effective, not simply replace them. The real opportunity is better decisions, not just lower costs.”

The final word goes to Ozone senior director of advertising Emma Cranston, who is another who feels the headwinds of recent years still feel very present.

But she reckons that while they were a reason to hold back previously, they now feel like the normal operating environment, and brands are doubling down on investing for growth.

Cranston adds: “The rebound in online display and two-year high for online video stand out for us, and we expect this to continue through the all-important Q4. We’d encourage marketers to find their audiences in the online spaces where they’re most engaged – an easy way to get more bang for their buck.”

She, too, concurs with the IPA’s Paul Bainsfair, who calls out the need to balance demand capture with demand creation, citing strong growth in promotional spend.

Cranston concludes: “It’s a conversation we’re having a lot with advertisers looking to balance brand-building with lower-funnel conversion. Increasingly, brands want both from every pound they deploy.”

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