We're not out of the woods yet

After a rocky start to the year, the latest Q2 2025 IPA Bellwether Report offers a welcome glimmer of hope for the marketing and advertising industry.

Marketing budgets are back in growth territory, with a net balance of +5.5% of companies increasing spend, reversing Q1’s -4.8% decline. The report shows a clear focus on revenue-driving activity, with the biggest increases seen in sales promotions (+9.4%) and direct marketing (+9.1%). Even events and PR budgets saw modest gains.

Main media advertising, which had suffered cuts in previous quarters, stabilised this time round. And online advertising (outside of video and audio) remains the only consistent growth area within this segment, up for the third quarter in a row.

There’s also a shift in sentiment, with business leaders less pessimistic than before. Confidence in company-level financial prospects has improved significantly (from -12.9% to -3.0%). Industry-wide sentiment remains negative, but with a notable improvement.

While employment intentions are still cautious (net balance of -5.3%), this is better than the previous quarter and reflects businesses adjusting to recent NI and wage cost increases.

What’s driving change?

• Increased reliance on digital and CRM-led marketing

• Continued AI integration to drive productivity

• Hints of revived consumer confidence as inflation eases

• Businesses positioning for growth with new product launches and market expansion

Outlook for 2026–2028 is more positive, with adspend expected to rebound and outpace this year’s subdued growth forecast of 0.7%.

The takeaway? We're not out of the woods yet, but confidence is creeping back. Businesses that continue to invest strategically, balancing short-term gains with long-term brand building, may find themselves ahead of the curve when recovery takes firmer hold.