It’s a knockout: Adspend revised up across the board

UK companies revised their total marketing budgets up to the highest level in Q3 2026 for over two years, with the growth comfortably exceeding executives’ outlook for the 2026/27 financial year, witnessing a stellar performance compared to initial projections.

That is according to the latest IPA Bellwether Report, which reveals that just over a quarter of panellists (25.6%) raised their budgets in Q3, compared with 11.3% that reported a reduction, resulting in a net balance of +14.3%.

While this marks a third consecutive quarter increase, with the net balance rising from +6.9%, interestingly, all seven Bellwether categories recorded marketing budget growth in Q3.

PR led the rankings, with its net balance rising from +1.4% in Q2 to a series high of +15.3%. This extends its current run of upward revisions to 13 quarters. Events slipped from first to second place in Q3, although its net balance rose from +11.0% in Q2 to a nine-quarter high of +15.1%.

Meanwhile, sales promotion budgets also rose sharply in the penultimate quarter of 2026. The net balance increased from +0.9% in Q2 to +13.1%, only surpassed by the record high reading of +13.4% set in Q2 2023.

Direct marketing budgets continue to rise, with the net balance increasing from +3.0% in Q2 to +5.2%, while market research spend also rose +5.2% — the discipline’s first positive reading in seven quarters and the highest since Q4 2021.

Moreover, main media advertising budgets — which have been sluggish for the best part of two years — also bounced back, with the net balance climbing from +1.5% in Q2 to a nine-year high of +9.8%.

For the first time since data on the five subcategories of main media were collected in Q1 2020, budget growth was broad-based.

“Other online” led the upturn, with the net balance markedly rebounding from -5.1% to +17.2%, followed by video, which rose from +8.2% to a two-year high of +9.8%.

Even out-of-home officially returned to growth, increasing from -2.5% to +3.6%, its only positive reading in the series history. Audio and published brands recorded modest but renewed increases, rising from 0.0% and -8.3% in Q2 to +1.1% and +0.8%, respectively.

Lastly, budgets in the “other category” recorded the weakest increase, with a net balance coming in at +1.0%. Nevertheless, this marked a sharp improvement from -10.8% in Q2 and the first upward revision to marketing budgets in nine years.

Crucially, revisions in all categories during the third quarter exceeded expectations set out by firms at the beginning of the 2026/27 financial year, with some also defying forecasts of budget cuts.

Even so, surveyed companies remained pessimistic about financial prospects at both the industry and company levels during the third quarter of 2026, despite sentiment being less negative than last quarter.

Respondents were again more pessimistic towards industry-wide financial prospects than company-own. The industry-level net balance remained firmly in negative territory at -20.3% but improved from -25.1% in the previous quarter, its highest level in nearly two years. More than a third of firms (34.6%) were downbeat, over twice the 14.3% that were optimistic.

At the company level, the net balance improved from -9.6% in Q2 to -2.7%. Bearish respondents accounted for 27.3%, slightly more than the 24.6% that were bullish.

When it comes to UK GDP, the growth forecast for 2026 has been raised since the previous Bellwether report to 1.2%, from 0.6%. S&P Global Market Intelligence attributed the upgrades to stronger-than-expected GDP growth in the first half of 2026, supported by the FIFA World Cup, hot weather and tech-related investment. However, the lack of a lasting US–Iran peace deal and high fuel prices remain headwinds.

In fact, high energy costs are expected to keep inflation above the Bank of England’s 2.0% target and are likely to weigh on household purchasing power. Nevertheless, consumer spending growth has shown resilience in 2026, leading the growth forecast to rise from 0.5% to 1.2% for 2026.

The S&P Global Market Intelligence Bellwether adspend forecast for 2026 has subsequently improved to 2.8%, from 2.1% in Q2. Growth for 2027 has been revised down from 2.3% to 1.3%, although expectations for 2028 (2.4%) signal a rebound.

IPA director general Paul Bainsfair said: “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.

“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.”

S&P Global Market Intelligence economist Maryam Baluch, who is author of the Bellwether Report, added: “With the UK economy beating expectations so far in 2026, it’s unsurprising to see businesses showing a strong willingness to lift marketing spend.

“The latest data shows a substantial rise in total marketing budgets during the third quarter, with several underlying categories recording exceptionally strong upward revisions. In all cases, quarterly budget growth exceeded expectations set earlier in the year, highlighting the breadth of the improvement.”

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