UK Marketing Budgets Just Hit a Two-Year High: Should You Spend or Hold?

Faryal Raza Bhatti

3 days ago

7 min read

UK Marketing Budgets Just Hit a Two Year High — Image Generated with ChatGPT showcasing Marketing Budget

Well, this is not the headline I expected to be writing in October.

After a flat end to 2025 and a cautious first half, UK marketing budgets have just had their biggest rise in more than two years. According to the IPA Bellwether Report for Q3 2026, a net balance of 14.3% of UK companies revised their marketing budgets up last quarter. That is double the figures from Q1 (7.3%) and Q2 (6.9%), and the strongest upward revision since Q2 2024.

So the obvious question is: should you be spending more too?

The short answer is yes, but probably not where most brands are putting it. Because buried inside the same data is a warning sign, and it is the part I think matters most.

What Did the IPA Bellwether Q3 2026 Actually Find?

UK marketing budgets grew across every category the IPA Bellwether tracks. That has not happened in a while.

Here are the numbers worth knowing:

Total budgets: net balance of +14.3%, the strongest in nine quarters
Main media: +9.8%, a nine-year high, up from just 1.5% in Q2
Every main media sub-channel grew for the first time: other online +17.2%, video +9.8%, out-of-home +3.6%, audio +1.1%
PR: +15.3%, its 13th quarter in a row of growth
Events: +15.1%
Direct marketing: +5.2%, up from 3% in Q2
Sales promotions: +13.1%, up from 0.9% in Q2, the biggest jump since Q2 2023

S&P Global, who compile the report, put the growth down to the FIFA World Cup, the hot summer and tech investment. They also raised their 2026 UK GDP growth forecast from 0.5% to 1.2%.

That is the good news. Now for the part most headlines skipped.

Why Is the Sales Promotion Jump a Warning Sign?

A 13.1% jump in sales promotion budgets looks like healthy activity. I read it as brands reaching for the quickest lever they have.

IPA director general Paul Bainsfair flagged it directly, warning that "excessive focus on today's sales can come at the expense of tomorrow's growth."

He is not guessing. A week before the Bellwether came out, Les Binet and Dom Boyd presented research at the IPA Effectiveness Conference based on 250 UK consumer goods marketing leaders. What they found is uncomfortable reading:

Brands now spend around twice as much on price promotions as on paid media
75% of marketers cannot estimate what share of their promotions are profitable
80% believe many promotional buyers would have bought anyway
81% judge promotions over less than 13 weeks, so long-term damage never shows up in the report

Think about that for a second. The single biggest line in many marketing budgets is one most teams cannot prove makes money.

PR is a good example. From what I have seen, businesses pay agencies £2,000 to £3,000 per placement, mostly to win backlinks. Across a year, that adds up fast. Yet when we report on it, most of us track domain authority and backlink profiles, not revenue. Those are useful signals, but they are not proof the spend is making money.

Are the Biggest Brands Spending Less on Advertising?

Here is the other tension. While UK budgets rise, the largest advertisers are spending a smaller share of their revenue on ads.

WARC Media's Global Ad Trends report, published on 14 October, looked at 25 of the largest US-based advertisers. Their combined ad-to-sales ratio fell from 6.1% in 2019 to 5.5% in 2025. Alphabet, Meta, Microsoft and Netflix saw one of the sharpest drops, from a combined 13.0% to 7.4%.

But, and this is the bit that matters, their actual ad spend still rose 56% over that period. Their revenue simply grew faster, at 73%. So this is not big brands giving up on advertising. It is big brands growing so fast that advertising became a smaller slice.

The consumer goods giants went the other way. Coca-Cola, L'Oréal, Nike, P&G and others grew ad spend by 36% against revenue growth of 29%. These are the brands that live or die on being remembered at the shelf, and they are leaning in.

And in the UK specifically, ad spend as a share of sales actually rose from 2.9% to 3.3% between 2023 and 2025. WARC says social media accounted for all of that increase. If you read my post on Meta overtaking Google in ad revenue, that will not surprise you.

So Should You Spend or Hold?

Let me be direct. Holding is the wrong call for most UK brands right now.

The economic backdrop has improved, competitors are spending, and main media just had its best quarter in nine years. If you go quiet now, you are giving away share of voice at the exact moment others are buying it.

But "spend" does not mean "spend on anything". Here is how I would split the decision:

Spend more on activity that builds memory: video, social formats with real creative, PR and brand search. These compound.
Hold steady on always-on performance channels that are already at a healthy return. More budget there usually means higher costs per result, not more customers.
Cut or test hard on promotions you cannot prove are profitable. If 80% of promo buyers would have bought anyway, a chunk of that money is a discount you gave away.

Is the Optimism Real, or a Sugar Rush?

This is where I want to be honest about the mood behind the numbers.

Companies are still pessimistic about their industry's financial prospects, at a net balance of -20.3%.

Their view of their own company improved to -2.7%, but it is still negative. More than a third of respondents were downbeat.

So marketers are spending more while still feeling nervous. That combination is exactly when brands reach for promotions, because promotions show results this month. It is also when brand investment gets cut first if Q4 disappoints.

The autumn Budget is coming, and food inflation is forecast to climb again in 2027. If the money dries up, the brands that put this quarter's increase into memorable work will be in a far better place than the ones that spent it on discounts.

My Honest Take

The budget increase is real, and it is good news. But a bigger budget does not fix a measurement problem. It makes it more expensive.

If you cannot tell which of your promotions make money, you are not ready to scale them. If your reporting window is 13 weeks, you will always undervalue brand work and overvalue discounts. That is not a strategy, it is a habit.

The brands I would bet on in 2027 are the ones using this window to fund work people actually remember, and measuring it over a long enough period to see it pay back.

What Should UK Marketers Do This Week?

List every promotion you ran in the last 12 months. Mark which ones you can prove were profitable. Be honest about the ones you cannot.
Extend your reporting window. Look at one brand campaign over six to twelve months, not six weeks. See what it did to brand search and repeat purchase.
Ring-fence part of any increase for brand. Even 10 to 20% of new budget into video, social creative or PR gives you something that keeps working after the campaign ends.
Check your search visibility before you scale paid search. With AI Overviews taking clicks, more paid budget can mean higher costs for the same traffic. I covered this in why your search traffic is dropping.
Test one new channel properly. If you have been curious about ChatGPT ads, a budget increase is the right time to run a clean test, not a token one.

Budgets are up. The question is whether you spend the increase on this quarter, or on the next three years.

Frequently Asked Questions

Are UK marketing budgets going up in 2026?

Yes. The IPA Bellwether Report for Q3 2026 found a net balance of 14.3% of UK companies revised marketing budgets up, the strongest rise since Q2 2024. Budgets grew in every category tracked, including main media, PR, events and sales promotions.

What is the IPA Bellwether Report?

The IPA Bellwether is a quarterly survey of around 300 marketing leaders from the UK's top 1,000 companies. It is compiled by S&P Global for the Institute of Practitioners in Advertising and tracks whether companies are raising or cutting marketing budgets.

Which marketing channels grew most in Q3 2026?

PR grew most, at a net balance of +15.3%, followed by events at +15.1% and sales promotions at +13.1%. Within main media, other online grew 17.2% and video 9.8%.

Why are experts worried about sales promotions?

Research by Les Binet and Dom Boyd found brands spend about twice as much on price promotions as on paid media. 75% of marketers cannot say which promotions are profitable, and most judge them over less than 13 weeks, so long-term brand damage goes unmeasured.

What is an ad-to-sales ratio?

An ad-to-sales ratio is advertising spend divided by revenue. WARC found it fell from 6.1% to 5.5% between 2019 and 2025 across 25 large US-based advertisers, while in the UK it rose from 2.9% to 3.3% between 2023 and 2025.

Should small UK businesses increase their marketing budget now?

If cash flow allows, yes, but put the extra into activity that builds memory, such as video, social creative and PR, rather than more discounts. Keep performance channels steady and test any new channel properly.

Quick Reference: UK Marketing Budgets Q3 2026

Measure	Figure
Total budgets, net balance	+14.3% (Q1 7.3%, Q2 6.9%)
Main media	+9.8%, nine-year high
PR / Events	+15.3% / +15.1%
Sales promotions	+13.1% (Q2: 0.9%)
Industry financial outlook	-20.3%
Own company outlook	-2.7%
Price promotion vs paid media spend	About 2x (Binet and Boyd)
Marketers unable to estimate profitable promotions	75%
Ad-to-sales ratio, 25 large US advertisers	6.1% (2019) to 5.5% (2025)
UK ad-to-sales ratio	2.9% (2023) to 3.3% (2025)