Observed Signal · Jul 15, 2026 · Market Research · Source: The Drum · Impact: 3/5 · Sentiment: Negative
IPA Bellwether: Budgets Up 6.9%, Confidence Dips
The IPA Bellwether for Q2 2026 shows a net balance of +6.9% of major UK advertisers increased marketing budgets (23.8% increased vs 16.9% decreased), the second consecutive quarter of net increases. Video was the only main-media sub-category to grow (+8.2%, up from +5.7% in Q1), while events saw the strongest uplift (+11.0%). Several categories declined or stabilised, including other online, published brands and out‑of‑home. Despite rising budgets, firm-level confidence fell (balance -9.6%) and the industry-wide financial outlook is weak (balance -25.1%, with 36.5% expecting deterioration vs 11.4% expecting improvement). S&P Global Market Intelligence has nudged up its UK GDP 2026 forecast to 0.6% and expects real ad-spend to grow 2.1% in 2026 (rising to 2.3% in 2027 and 2.4% in 2028).
IPA Bellwether survey provides timely, quantitative signals on advertiser budget allocation and industry confidence; useful for media planning and forecasting but not a platform policy or technical change.
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Key Takeaways & Evidence Grounding
- Net balance of +6.9% of advertisers increased marketing budgets in Q2 2026 (23.8% increased vs 16.9% decreased), the second consecutive quarter of net increases.
- Firm-level confidence fell (balance -9.6%); industry-wide financial outlook balance was -25.1% (36.5% expect deterioration vs 11.4% improvement).
- Video advertising grew with a net balance of +8.2% in Q2 2026 (up from +5.7% in Q1 2026).
- Events budgets recorded the strongest growth (+11.0%); other online (-5.1%), published brands (-8.3%) and out-of-home (-2.5%) declined.
- S&P Global Market Intelligence raised its UK GDP 2026 forecast to 0.6% and forecasts real ad-spend growth of 2.1% in 2026 (2.3% in 2027; 2.4% in 2028).
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Related Market Signals & Shifts
Recent verified developments and strategic activity across this market segment.
UK Marketers Cautiously Boost Budgets Amid Economic Uncertainty
UK marketing budgets rose for the second straight quarter in Q3 2025 according to the IPA Bellwether Report, though growth slowed amid economic and political uncertainty ahead of the Autumn Budget. The net balance was +3.6%, down from +5.5% in Q2, with 22% of panellists reporting increases and 18.7% reporting reductions. Growth was driven by events and direct marketing, while main media budgets remained flat; video and online categories grew, but budgets for published brands, audio, and OOH declined, and sales promotions fell to -0.9% from +9.4%. The IPA kept its 2025 ad spend forecast at 0.6%, while 2026 forecasts were trimmed from 1.6% to 1.2%. The report emphasizes balancing immediate ROI with long-term brand building, as AI tools reshape research and targeting and push spend toward ABM, LinkedIn, Meta, earned media, and programmatic channels. Industry voices stress accountable measurement, stronger brand storytelling, and a continued shift toward omnichannel strategies into early 2026.
UK Video Budgets Return to Growth, IPA Bellwether Q3
The IPA Bellwether Report for Q3 2025 shows the UK ad market edging back into growth, with a net balance of +3.6% of marketers increasing spend in Q3, down from +5.5% in Q2 but still positive. Video budgets returned to growth with a net +6.7%, while main media budgets were unchanged at 0%. Growth was driven by events (+10.9%), direct marketing (+9.7%), and PR (+2.5%), reflecting resource reallocation toward targeted channels. Company-level optimism rose to +2.9%, the first positive company outlook since mid-2024, though industry-wide sentiment remained negative at -24.0%. Projections show 2025 ad spend at 0.6%, 2026 at 1.2%, and 2027–2028 at 2.1%, underlining macro headwinds ahead of the Autumn Budget. Executives emphasize the value of advertising and the importance of big, brand-building budgets to sustain growth in a cautious economy.
Global Brands Ditch Labour-Based Agency Fees, WFA Finds
A new report from the World Federation of Advertisers (WFA) and Agency Mania Solutions, titled 'How Brands Define, Scope and Reward Agency Work', reveals a significant shift in agency compensation models. Based on responses from 69 multinational companies with a combined marketing spend of $147 billion, the report finds that labour-based payment models, which were dominant in 2011, now represent the main compensation model for only 19% of global brands. Meanwhile, fixed-fee/output models have risen to 33%, and 'Labour + Performance' models to 21%. Performance-based fees show the strongest momentum, with 63% of multinationals expecting to increase their use, driven by AI, which is compressing labour hours. However, only 20% have evolved their commercial models in response to AI, though 61% intend to. The report also notes a shift in focus towards factors like briefing quality and trust over financial incentives.
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