UK marketing budgets made a bounce back in Q2 2025, following their drop in the previous quarter. We look at what industry leaders make of the latest findings. 

Marketing budgets expanded at the strongest pace in a year during the second quarter of 2025, the latest IPA Bellwether Report finds. A +5.5% net balance of panellists reported a rise in their total marketing budgets, with 22.7% registering an increase and 17.2% reporting a decrease. The rise marks a contrast to the previous quarter, which saw overall budgets decline for the first time in four years. 

This came as marketers continued to face headwinds from geopolitical and economic uncertainty. The report suggests that companies recognised the need for more direct targeting of their audiences, which prompted an investment increase in digital channels, while the launch of new products also drove further marketing efforts. 

Paul Bainsfair, IPA’s Director General, noted that the increase in spend was largely driven by marketers employing tactical approaches. With this in mind, he highlighted the importance of marketers balancing short-term activation efforts with longer-term emotionally-driven brand-building strategies. 

Direct marketing recorded robust growth, with almost 19% of panellists reporting an increase, marking upward budget revisions in the category for the past ten quarters. Less than 10% made a decrease. Similarly, sales promotions reached their highest net balance in two years at +9.4%, with 19.8% of companies revealing upward revisions, almost doubling the number which reported a decline. 

Unsurprisingly, the events category saw a budget increase, although the degree to which they were raised eased again, as net balance fell to +3.9% from +5.4% in Q1. 

The only two tracked areas which saw overall downward budget revisions were market research and the ‘other’ category. 

We asked a range of ad experts what they make of the findings, and what advice they can give to industry members…

The industry must shift away from a reliance on vanity metrics to smarter revenue-driving outcomes

In today’s climate, marketing accountability shouldn't be a luxury. While the increase in marketing budgets and a move towards optimism is welcomed, the focus on short-termism is a sign that marketers are trying to achieve more with even tighter resources. This is not sustainable.

The brands who will thrive, drive genuine impact and see impactful ad spend return are those who remain focused on true effectiveness. However, this requires a clear and concise understanding of what actually works and an industry shift away from a reliance on vanity metrics to smarter revenue-driving outcomes. Those brands that are brave enough to make this move will unlock the power of data-driven decisions that will redefine their campaigns for the better and help facilitate growth.

Kim Berkin, Managing Director, Charlie Oscar

Consistent brand-building efforts are essential for long-term success

Despite ongoing economic uncertainty, it’s positive to see that overarching marketing budgets have been increased. Notably, this growth has been driven in part by investment into direct marketing or media pillars that allow for true focus on consumers or outcomes.

While this approach is understandable in uncertain times, brand-building has taken a back seat to instead focus on short-term security, but as we know consistent brand-building efforts are essential for long-term success. As the market dynamics evolve, it will be interesting to see if brands take a more sustainable approach and return to mixing short and long-term marketing investments. While economic stability is on the wishlist for us all, seeing the upward projection going forward does foster positivity. Brands that work with advertising partners who can continue driving innovative and secure ways of finding consumers will be the ones who benefit.

Marko Johns, UK Managing Director Head of Agency, International, Seedtag

Marketers are raising more and more concerns about the transparency and control of social platforms 

The expansion in marketing budgets and positivity reflects the conversations we’ve been having with advertisers recently, and promises a strong second half of the year. 

Although social platforms are highlighted in the report as powerful channels for driving digital sales, we’re having more and more conversations about the concerns marketers have with their transparency and control. The recent tracking breach by Meta has prompted questions around how platforms operate for brands and the visibility they have into where their ads are being served. 

While these platforms continue to get the lion’s share of advertising budgets and may seem an easy and efficient option, with the right partners and tools, the open web is now a curated, high-performing, and far more ethical and accountable space for brands. And, when you invest advertising budget in quality publishers, it also supports the quality journalism that we need more than ever.

Mariana Carvalho-Jones, Senior Brand and Agency Sales, Mantis

AI – Friend or foe? 

AI is both an opportunity and a threat. With AI summaries limiting click-through to websites, it will have a significant impact on ad revenues for many. On the flip side, businesses are starting to see how productivity gains from AI help to retain clients and support media planning. This positive impact may be contributing to the resiliency and increased budgets we’ve seen in Q2, as well as marketers’ confidence in targeting their own audiences directly. 

We are at the beginning of a macro trend, the direction of which will be heavily influenced by the quality of the data fed into AI platforms. We have yet to see whether it becomes friend or foe.

Vinod Kashyap, Chief Product Officer, Digital Envoy

We can see a clear focus on short-term performance

After a challenging Q1, it’s reassuring to see confidence returning to the market with budgets rebounding in Q2. The growth in sales promotion and direct marketing highlights a clear focus on short-term performance, which makes sense given the economic climate.

But as long-standing research has shown, brands that balance immediate activation with long-term brand building tend to outperform over time. The real challenge now is maintaining that balance, ensuring today’s marketing efforts drive both quick wins and lasting impact.

With investment returning, marketers are doubling down on smart, flexible strategies – blending data, creative, and cross-channel planning to deliver now and build for the future.

Dean Nagib, UK country manager, Azerion 

Brands that continue to invest in long-term purpose and perception are the ones that weather disruption and emerge strongest 

After a sharp marketing spend contraction in Q1, the return to growth this quarter, even amid ongoing geopolitical turmoil, suggests brands are beginning to accept uncertainty as the new normal and are gradually reactivating investment. Confidence clearly remains fragile, with much of that spend still directed at short-term tactics like sales promotions and direct marketing.

It’s understandable that marketers are approaching long-term brand investment cautiously, balancing rising costs with pressure to show immediate results. However, a decade of data from the FutureBrand Index shows that brands that continue to invest in long-term purpose and perception are the ones that weather disruption and emerge strongest. 

Take Nike as an example: while it beat Q4 earnings forecasts, the brand remains under pressure as it faces the challenge of absorbing a USD$1bn (£746m) tariff hit. As it navigates this uncertainty, it has the chance to draw on its deep cultural capital and global resonance, strengths that underpin its strong performance in the FutureBrand Index, where two-thirds of consumers say they would continue to support brands they admire during times of financial turbulence. 

Lauren Maynard, Chief Growth Officer, FutureBrand

Brands are increasingly investing in hyper-personalisation 

There is no doubt that financial caution remains high, with marketing teams under pressure to prove their direct contribution to growth. Yet, the short-term need to manage risk and internal pessimism is mixed with long-term optimism. 

With B2B buyers doing significantly more research before they even engage with a brand, let alone purchase from, we’re seeing brands increasingly invest in hyper-personalisation. Many are using AI to not only process vast amounts of data and track competitors, but to spot unmet or emerging customer needs at scale and speed. 

The ability to create differentiation at scale is vital, particularly in growth industries such as Industry 4.0, SaaS and Automotive, all of which rely on complex solutions. Marketing must play a role in simplifying those complexities, being present earlier to give buyers something helpful, that is right for them. These industries also face the fiercest competition, so spend must be focused on grabbing buyers' attention through thought leadership and a clear direction of ROI.  

Most importantly, marketing efforts should not stop after a customer buys. Instead, they must leverage personalisation to ensure customers get the most from a product or service, which in turn will drive retention and opportunities for upsell. It is also a powerful way to build customer testimonials, which are ever more important as the truth of information is heavily scrutinised and authentic advocacy is the panacea.

Rachel Lofthouse, Managing Director, UK & Europe, Fox Agency  

A pivot from impressions to impact and from awareness to action

As brands double down on outcomes, we see a clear pivot from impressions to impact and  from awareness to action. Engaging video with high-impact formats like interstitials, playables, and rewarded video – formats that deliver real, measurable results are key to this. Performance and brand aren’t opposites; they’re partners in growth. That’s why the future belongs to media solutions that move hearts and the bottom line.

Alex Stil, Chief Commercial Officer, Verve

Brands must not neglect their community 

This is unfortunately a classic trend in times of economic uncertainty, but one we have seen enough times to know the long term damage for brands of these short-term cuts. Particularly when brand-building activity is cut, brands will feel the effects for years to come. 

On a positive note, restricted circumstances can lead to the greatest creativity. Investing in scrappier and more experimental channels like social and creators can lead to some really amazing work. 

My main bit of advice for brands in this climate? Don't neglect your community. Keep them engaged, keep talking to them online, keep your customer service strong and maintain those existing, nurtured relationships. People are still scrolling and, although purchasing behaviours may be different, they're still shopping. Don't allow competitors to take what you've built and make sure your community is still by your side when we come out the other side.

Kerry Baird, Social Strategy Director, Spin 

Brands need to begin behaving differently

While it's encouraging to see marketing budgets rebound in Q2 compared to Q1, growth shouldn't be defined by spend alone. Budgets remain constrained, and outspending the competition is neither sustainable nor effective. Ultimately, we need two things: alternative long-term strategies and brands understanding that they need to begin behaving differently.

The most effective work doesn't start with a format; it starts with a progressive marketing team and a powerful idea that shapes the media around it while building a meaningful connection with the intended audience. 

Saj Nazir, SVP Media Creativity, Mediahub's Radical + Disruptive Lab 

AI-powered automation is a significant opportunity

The latest IPA Bellwether Report shows a strong rebound in advertising spend, with marketing budgets expanding at their fastest rate in a year. As advertisers seek to make the most of declining inflation and renewed consumer confidence, AI-powered automation offers a significant opportunity in advertising. In particular, SSPs are utilising AI to streamline how ad inventory is bought and sold, providing advertisers with optimised campaign performance and improved ROI on digital campaigns.

Joseph Worswick, VP of EMEA, Global Head of Sustainability, OpenX

Marketers should harness agentic AI 

It’s no surprise to see AI and visual content flagged as key growth areas in the latest Bellwether. In today’s fractured media landscape, they’re becoming the price of entry for effective digital campaigns. However, with online marketing budgets also rising, the battle for attention is becoming increasingly fierce.

Automation alone no longer cuts it. What matters now is nuance and using the right tools to deliver relevance at scale. That’s where agentic AI comes into its own. By analysing enriched, impression-level signals from editorial context and imagery to tone and sentiment, advertisers can understand what elements are driving performance and why. This powers real-time creative optimisation and brings sharper transparency to media effectiveness at a time when scrutiny on outcomes is only growing. Those who tailor their creative using these signals to purchase-ready audiences will be the ones who turn engagement into real results.

Guy Jackson, Chief Commercial Officer, RAAS LAB

Brands must embrace complexity 

The latest IPA Bellwether offers grounds for cautious optimism. Budgets have been fairly robust in Q2, with advertisers rightly keeping their brands in front of consumers to lay the groundwork for further growth, but recent figures from the ONS show that inflation remains persistent. To navigate these headwinds, advertisers are having to prioritise effective media. In particular, the report’s respondents highlighted the value of direct targeting in online channels, and the use of AI-driven automation to boost efficiency, reduce costs, and deliver the scale, speed, and insight needed to optimise campaigns.

As advertisers consider which channels will drive business-specific outcomes, it’s essential to consider the media mix as a whole. While channels like OOH and audio had a reported decline, this does not align with the interest we’ve seen from clients in testing these buoyant environments. These ‘top-of-funnel’ channels, including premium video, are evolving rapidly, and technology is uniting insight across them to close the traditional gap between brand-building and performance. With consumer journeys increasingly fragmented, brands that embrace this complexity, ensuring consistency and relevant campaigns across all touchpoints, will succeed. Identity-driven solutions are key, enabling better measurement and optimisation, and more meaningful engagement at scale.

Phil Acton, Country Manager UK, Adform

The role of visual content in driving consumer engagement 

The rebound in UK marketing budgets in Q2 signals renewed confidence from brands, with spend directed toward channels that balance creative impact with measurable outcomes. A key insight from this quarter’s Bellwether report is the rising influence of visual content in driving consumer engagement, particularly as marketers navigate a crowded and fragmented media landscape.

Smart TVs and the home screen in particular are playing an increasingly important role in how brands connect with viewers during key discovery moments. Native, high-impact formats are gaining traction as advertisers look to capture attention in more innovative ways in a world where ad loads are increasing in streaming environments while attention spans are getting shorter.

As audiences come to expect seamless and premium visual experiences, the focus is shifting toward solutions that combine strong storytelling with accountability and performance. The home screen, as a first point of contact, presents a valuable opportunity to achieve both.

Ed Wale, VP International, LG Ad Solutions