UK marketing budgets hold near two-year high — but confidence is slipping
- Jul 20
- 3 min read
Updated: 4 hours ago
UK marketing budgets grew again in the second quarter of 2026, reaching their second-highest level in almost two years, according to the closely watched IPA Bellwether Report. Almost a quarter of companies (23.8%) increased spending against 16.9% who cut it, producing a net positive balance of +6.9% — only marginally below Q1's +7.3% and a clear signal that marketing investment is holding firm despite a turbulent economic backdrop.
Yet the headline figure hides a more complicated picture. Confidence in companies' own financial prospects fell sharply into negative territory at -9.6%, down from +0.6% the previous quarter, while a net -25.1% of firms now expect wider industry conditions to worsen over the coming year. In other words, marketers are still spending — but they are doing so with growing unease about what lies ahead.
Where the money is going
Not all budgets are moving in the same direction. Events remained the standout performer at +11.0%, as brands continued to pour money into live, experiential moments that build genuine connection. Direct marketing (+3.0%), main media (+1.5%) and PR (+1.4%) all recorded modest growth. Market research, however, slipped to -4.1%, and budgets for other activities fell more steeply still — a reminder that when caution creeps in, the lines seen as harder to measure are the first to be trimmed.
The pattern points to a market that increasingly rewards accountability. Spending that can be tied clearly to outcomes is proving resilient, while activity that is harder to justify in a boardroom is under mounting pressure. Performance channels, measurable events and demonstrable return on investment are winning the internal argument for funding.
The bigger picture
Zoom out, and the Bellwether tells the story of an industry that has learned to keep investing through uncertainty rather than slamming on the brakes at the first sign of trouble. That marks a real change from previous downturns, when marketing was often the first budget line to be cut. The evidence of the past decade — that brands which maintain investment through tough periods tend to emerge stronger, with greater share of voice and lower customer acquisition costs — appears to have been absorbed at board level.
For finance directors and marketing leaders alike, the challenge now is allocation rather than appetite. With confidence soft but budgets intact, the pressure is on to move money towards the activities that demonstrably work and away from those that simply fill a plan. Expect scrutiny of everything from agency retainers to media wastage to intensify over the next two quarters, and expect the brands that invest in measurement to find that conversation far easier.
The next Bellwether, due in the autumn, will be watched closely for signs of whether that soft confidence starts to bite. For now, the headline is reassuring: UK marketers are still backing their budgets, even as they brace for a bumpier ride into 2027.
Budgets rising while confidence falls tells you everything about 2026: marketers are being asked to do more with the same money. The winners won't be those who spend the most, but those who can prove where every pound goes. Measurement isn't a nice-to-have anymore — it's the whole game. — Daniel Nikolla, Founder of Merx Marketing
For marketers, the message is simple: protect your budget by proving your impact. In a cautious market, the teams that can tie spend to revenue are the ones that keep — and grow — their investment.
Do you expect your marketing budget to grow or shrink in the second half of 2026 — and is your measurement keeping pace with your spend?
If you would like to know more about this topic, please contact us on danieln@merxmarketing.co.uk
Related reading
Comments