The Industry Responds to Bellwether Report and Q2's Rebounding Budgets

After a rocky start to the year, UK marketing budgets bounced back sharply in Q2 2025, according to the latest IPA Bellwether Report, published today. Marketers reversed the first spending decline in four years seen in Q1, with a net balance of +5.5% of companies increasing their budgets, up significantly from -4.8% last quarter and marking thestrongest quarterly growth in a year.

However, the recovery is not without caveats. The bulk of the increase was driven by short-term, performance-oriented activity, most notably sales promotions and direct marketing, which posted the highest net gains. Events and PR also saw moderate growth, while main media spend flatlined, with only online sub-categories registering uplift. In fact, traditional brand-building channels such as out-of-home and audio continued to decline, highlighting a market still tilted toward tactical, activation-led activity.

Meanwhile, business confidence has shown signs of improvement, but remains in negative territory overall. Company-level sentiment rose from a net balance of -12.9% in Q1 to -3.0% in Q2, while industry-wide outlooks remain notably downbeat at -26.2%. Reflecting this cautious climate, S&P Global’s adspend forecast for 2025 has been revised down from 1.3% to just 0.7%, despite expectations of modest GDP growth.

Together, the findings paint a picture of an industry regaining momentum, but with one eye still firmly on the risks ahead. LBB's Olivia Atkins speaks to a number of industry faces to find out their thoughts.

Katie Earlam, director of creative strategy at 72Point

In today’s uncertain market, brands under pressure to deliver short-term results risk overlooking the long-term value of earned media. While sales activations offer immediate wins, consistent brand storytelling builds credibility, authority and trust over time, especially when powered by the strategic use of large language models.
LLMs are changing how brands create, scale and personalise editorial content. They help distil complex stories into compelling media narratives, uncover newsworthy angles in brand data and generate tailored pitches that resonate with journalists. This enables brands to stay visible and relevant without relying solely on paid channels.
As budgets tighten, we’re seeing brands innovate by integrating LLMs into newsroom-style functions, combining editorial expertise with AI efficiency. The result is faster content delivery and stronger media appeal.

In a flat media landscape, brands investing in intelligent earned media strategies today are more likely to sustain visibility, grow brand equity and emerge stronger in the long term.

Heather Freiser, partner, at Lighthouse Creative

We believe brands don’t have to choose between performance and brand, the smartest marketers are designing systems where the two feed each other. But that only works when short-term tactics are rooted in long-term meaning.

The risk of underinvesting in brand isn’t hypothetical, it’s visible. Brands that went dark or scale back during downturns need to claw back relevance. Meanwhile, culturally magnetic brands show how strategic brand building is a growth play, not just a vanity exercise.

We’re seeing innovation where clients:

• Invest in community as media: turning owned platforms, newsletters, and even customer support into brand-building tools.
• Use performance media to test narrative: what hooks, what converts, what drives quality acquisition.
• Create earned-first campaigns that can stretch budgets while building brand equity and results.

For creatives and strategists, the moment calls for rigor and imagination. Tighter budgets don’t have to mean safer ideas, they demand smarter ones, especially in the age of AI everywhere. Is this a return to confidence? I don't think it is just yet. But if brands find ways to truly embrace an integrated approach over bargain-bin (and frankly, boring) tactics, we might get there.

Dom Goldman, founder/chief creative officer at You’re The Goods

The industry is still stuck in a false choice between brand and performance. The smartest brands and the bravest CMOs know you can and should do both. WARC’s Multiplier Effect study proves it. Integrated campaigns that blend brand and performance are 2.6 times more likely to beat profit and revenue goals. But that only works if the thinking shifts. You can't just bolt brand onto a media plan. You need ideas that break the funnel. Stories powerful enough to build memory and meaning while pulling people straight into action. A great story doesn't just entertain. It seduces. It invites participation. That's where we're seeing real results. Brand ideas that drive performance in the same move.

John Barton, founder at Thumbstoppers

Short-termism is creeping in everywhere and it’s understandable when the spotlight is on spend in a jittery economy. But brands playing it safe aren’t just stalling, they risk quietly eroding their cultural relevance. The smartest clients we work with aren’t cutting innovation, they’re squeezing more from it. For us, we look at every shoot like an ecosystem: hero film, social cutdowns, reactive TikToks, influencer-led edits (instead of one-hit-quit stings), even TikTok Live streams are yielding gold in lo-fi, relatable content.

That said, too often these outputs still feel like box-ticking disciplines siloed instead of connected. And while brands are busy chasing short-term wins like promos, stunts and shallow performance they’re starving long-term brand equity.

There’s almost always a smarter way to adapt to market pressure without burning the foundations of what makes a brand matter as long as the brand team feels supported to do so by the wider business.

Chris Ambidge, chief growth officer at Collaborate Global

An uplift in spend is always a tonic, bringing confidence and optimism. It’s no surprise activations and events are leading the way; in a complex world, people crave connection, joy, and shared human moments. Brands are responding boldly.
At Collaborate, we’re seeing clients embrace increasingly creative immersive experiences delivering both short-term performance and long-term equity.

Take the Goodwood Festival of Speed. Once a niche event, now a playground for lifestyle, tech, and healthcare brands. This year, we partnered with eBay, Randox, and TAG Heuer to create striking, digitally enhanced activations. The goal? To meet consumers where culture is happening.

We believe that experiential is becoming the new media space – rich in storytelling, community, and memorability. With an added bonus. It’s now measurable. Brands can track engagement and real-time ROI like never before.

Audiences have shifted. They’re experience-hunters and community-seekers. Brands that show up with authenticity will earn lasting relevance even in cautious times.

Chris Thurling, chairman at Armadillo

The Q2 Bellwether Report reveals a welcome rebound in UK marketing budgets, but the real story is brands spending smarter, not more. Brands' significant martech investments, now AI-enhanced, are finally delivering efficiencies as these technologies automate tasks traditionally handled by agencies. However, as martech platforms become table stakes, we see the real battle shifting to what machines can't do.

In the CRM and direct marketing space, as economic headwinds make every sale crucial, clients are increasingly seeking three key capabilities: specialist martech expertise to unlock hidden platform potential, strategic thinking that cuts through market noise, and creative execution that captivates audiences and stops them scrolling.

The winners aren't just deploying automated campaigns, they're combining deep technical platform knowledge with brand strategy and creative excellence. While AI will increasingly handle the operational heavy lifting, human expertise in martech optimisation and strategic creative thinking becomes the differentiator. Smart brands recognise that when everyone has access to the same powerful tools, success belongs to those who can think differently about how to use them.

Tom Roach, VP brand strategy at Jellyfish

It’s a positive sign overall for the UK ad industry that clients’ budgets were revised upwards in Q2 2025. But whilst the IPA uses the rise in digital spend as an opportunity to preach to clients about not forgetting the importance of long-term brand building - you could argue it’s actually a vote of confidence in digital channels growing ability to both drive immediate sales and also build brand, which will partly be driving the continued, long-term migration of spend to digital platforms.

The report notes the growing demand for visual content and the power of social media platforms which further validates the importance of a comprehensive, integrated digital communication strategy, which in my view means ‘digital’ needs to stop being seen as only ever playing second fiddle to a brand’s ‘main media’ advertising strategy and execution -- given it’s clearly playing a leading, strategic role for many.

Crucially, the report also sheds light on the evolving role of AI in our industry. This presents a huge opportunity for agencies like Jellyfish, not just in deploying AI for productivity gains, but also in developing the skills needed to maximise AI’s potential. With our industry-leading AI training offering, we’re uniquely positioned when it comes to upskilling both clients and our own people.

The report also raises a critical point regarding AI: the emerging threat to web traffic caused by AI reducing the need for click-through from search engines. This underscores that a simplistic approach to AI in marketing is insufficient, and highlights the imperative for sophisticated AI strategies that go beyond basic automation. At Jellyfish, we believe brands need to plan their approach to the LLMs as a new audience in a holistic way - brands need to build marketing plans for two audiences now -- people and the LLMs -- and think about how these two audiences interact and influence each other.

Antti Toivonen, managing director at Superson

In the current climate short-termism is understandable: more stakeholders need to be convinced about spend, and the best way to build trust back is to show impact. Focus on short-term gains risks eroding brand distinctiveness and equity over time.
However, we see innovation, or curiosity for it, in AI-driven formats. These experiments don’t require large budgets and are easier to justify, as AI is now on every C-suite agenda. It’s a low-cost, high-interest area where brands can test and learn without overcommitting.

When it comes to creative work, there is appetite for strong ideas, but they must be delivered with greater efficiency. Co-creation models and lean sprint processes (like Superson's) are increasingly key to achieving quality at speed. Still, what we’re seeing feels more like a spot of reactive, overly safe spend than a full confidence revival. A genuine shift may still be a few quarters away.

Maria Rubio, marketing manager at Spin Brands

As a marketing manager, I get the pressure to prove value... fast. But the continued tilt toward short-term activations risks turning marketing into a string of isolated wins with no real compounding effect. You can’t build memory, meaning or momentum that way.

The brands getting it right aren’t necessarily spending more, but rather being braver with how and where they show up. That means tapping into culture with intention or making creative that works with platforms rather than against them, and thinking long-term even if in smaller bursts.

I don’t think we’re fully out of reactive mode (we probably never will be), but there’s definitely a growing appetite to test smarter and create work that earns attention beyond the hook. And, to me, that’s a good place to start.

Dan Brink, head of data at UniLED Software

It’s encouraging to see an uptick in marketing budgets in Q2, but as always the devil’s in the details. The report may show less industry pessimism but the increase in spend on short term, more tactical activations is evidence marketers are continuing to make risk-averse media investment decisions. Short-termism is not a sustainable business growth strategy and should be balanced with long-term brand building.

In H2 2025, it is vital that agencies and advertisers not only have a razor-sharp focus on measurement. But perhaps more importantly have access to accurate third-party data that can be used to verify the precision of ad campaign delivery, both short and long term. Only then can future media planning be optimised to include the media channels -- such as DOOH -- that unlock ad effectiveness by gaining high-levels of attention and audience connection, and help to avoid ad spend wastage.”

Sohel Aziz, regional managing director at Accenture Song UKIA

The Q2 Bellwether shows UK marketing budgets rebounding, but growth is still skewed to short-term activations, signalling reactive spend, not full confidence. Brands should rebalance by connecting short-term wins to a clear brand platform and sustaining brand-building investment to protect equity and future growth.

This moment also demands a rethink of how we measure ROI — moving beyond channel‑specific metrics to focus on business outcomes like share, margin, and lifetime value. Without that linkage, short‑termism risks eroding long‑term resilience.
We see clients innovating through owned content, creator partnerships, smarter data use, and hybrid experiential campaigns. Generative AI is accelerating this shift — enabling more personalised, efficient content at scale, faster testing and learning, and sharper insight generation — but it also raises the bar for creativity and strategic clarity.
Now is the time to innovate and reframe marketing as a driver of business growth, not just spend efficiency — brands that do will emerge stronger.

Jenny Stanley, managing director at Appetite Creative

When budgets get tight, I see brands making the same mistake over and over, they think they have to choose between short-term sales activation and long-term brand building. It's a false choice that's hurting everyone. The real problem is that traditional brand-building channels can't prove their ROI clearly enough for CFOs to feel comfortable.

That's why I'm so excited about connected packaging. It's the rare marketing asset that delivers both immediate results and long-term brand equity simultaneously. You get direct sales uplift, data acquisition and promotional participation without media costs and zero wastage -- that's your short-term win. But you're also creating sustained engagement and building brand loyalty through owned touch points that tell your story.
The beauty is in the data. Unlike traditional brand channels, connected packaging gives you granular ROI metrics that justify both activation and brand investment. It makes the whole short-term versus long-term debate irrelevant.

Nick Ford-Young, co-CEO at Boldspace

Marketers should welcome the rebound in budgets reflected in the latest IPA Bellwether, but the prevailing focus on short-term activations cannot come at the expense of long-term brand health. While delivering immediate results is critical, it is continued investment in building brands that sets the foundation for sustained growth. History shows that brands that maintain or even increase long-term activity during uncertain times are those best placed to accelerate as market confidence returns.

At Boldspace, we’re seeing a surge in demand for AI-driven innovation and a desire from clients to understand how to deploy these technologies for maximum value. Our role now is shifting to being a partner with CMOs to achieve this -- guiding them to strike the right balance between short-term gains and long-term brand equity, while embracing the innovation needed to stay ahead.

Marketers should see the current optimism not as a brief window, but as the start of a new cycle where creativity, technology and smart investment pave the way for long-lasting impact.

Patrick Reid, CEO at Imagination

The latest Bellwether report shows welcome growth in marketing budgets, but also a familiar pattern. Brands are prioritising short-term gains, with spend leaning heavily into performance channels like direct marketing and sales promotions. Experiential marketing remains in growth, but the pace has eased. The intent is there, brands still recognise the power of real-world engagement, but they’re being more measured in how they invest.

That’s understandable in a cautious market, but it’s a risk. Experiences don’t just drive emotional connection, they deliver commercial impact, brand loyalty, and long-term equity. The smartest brands aren’t just chasing clicks; they’re building presence, momentum, and memory. Experience is where short-term action meets long-term brand value. It’s not a nice-to-have -- it’s how great brands grow.

Jonathan McCallum, SVP managing director Europe at George P. Johnson

At GPJ, we believe brands thrive when they connect emotionally and authentically. Striking the balance means aligning short-term performance with long-term brand storytelling, especially in live and digital experiences that can deliver immediate measurable impact. Underinvesting in brand erodes equity and relevance, a risk magnified in uncertain market conditions. But, we’re seeing bold innovation in hybrid experiences, purposeful design, and creative tech, demonstrating creativity doesn’t always require massive spend. Especially when it's targeted at high value customers and potential brand converts. While some budgets remain reactive, confidence is emerging as brands focus on engagement with maximal returns. Less mass spend, more focused investment.

Matt Broekhuizen, head of loyalty and CRM at VCCP

Direct marketing saw one of the biggest jumps in Q2, with a net balance of +9.1% -- the highest since Q3 last year. In uncertain times, brands are turning to channels that offer precision, measurability, and a faster path to ROI. But short-term effectiveness doesn’t have to come at the expense of long-term brand health, if it’s done right.

At VCCP, we believe ‘It only works if it all works’, integration across brand, experience and communications delivers sustained value. Direct marketing, when aligned with an integrated brand strategy, can be a powerful driver of long-term growth. For example, our recent research with the DMA found that brands with integrated loyalty programmes are eight times more likely to retain customers long-term and 80% more likely to acquire new ones. The latest Bellwether figures show where spend is shifting - now’s the time to ensure that shift is strategic, not just reactive.

Niusha Koucheksarai, managing director at Uncovered

Let’s not confuse reactive spend with real confidence. A bump in budgets is great, but leaning too hard into short term wins at the expense of brand building just doesn't pay back. Strong, consistent brand storytelling matters. Always.

What we see working at Uncovered is where creative and media are genuinely integrated. Whether that’s in-house or through brilliant collaboration, it keeps strategy focused and execution fast, sharp, and culturally relevant.

And speed does matter. In social, we see it every day. Trends move fast, AI tools evolve overnight, and creativity is more democratic than ever. Brands have to anchor themselves in clear positioning otherwise things become scattergun. Eye catching on the quarters bottom line, but failing to build memory that will sustain through the longer term.

The challenge now is to think fast and long. Brands that truly align creative and media, from briefing to execution, will be best placed to do both.