Marketing Spend Rebounds in the UK
Marketing budgets in the UK are on the upswing, with companies increasing spend for a second consecutive quarter despite a difficult economic climate. According to the latest IPA Bellwether Report (Q3 2025), 22.3% of surveyed firms raised their marketing expenditure between July and September, versus 18.7% that cut back. This yielded a net balance of +3.6% of companies increasing budgets – a positive trend following Q2’s +5.5% and a stark improvement from the -4.8% seen in Q1. While the Q3 growth rate eased slightly compared to Q2, it solidifies back-to-back quarters of expansion in marketing spend, indicating cautious optimism returning to the industry.
Digging into the categories, public relations (PR) emerged as one of the areas with continued budget growth. PR spend saw a net increase of +2.5% in Q3 (with 15.3% of companies upping PR budgets, against 12.7% reducing) – marking the ninth straight quarter of modest gains for PR allocations. This momentum aligns with marketers’ plans for the 2025/26 financial year, where a net +3.3% of firms anticipated higher PR budgets. PR was not the only winner: events and direct marketing saw the strongest boosts, as their net balances surged to +10.9% and +9.7% respectively. These increases far outpaced other areas and reflect a strategic shift. “According to panellists, growth in these modes of marketing reflected the reallocation of resources to methods which enable brand managers to be more targeted, focusing on lead generation and customer engagement,” the Bellwether report noted. In other words, brands are favoring tactics that drive direct engagement and measurable results – such as in-person events, one-to-one communications, and PR – especially as they seek efficient ways to reach customers in a challenging environment.
Not all marketing activities are sharing in the growth. Notably, main media advertising budgets (covering big-ticket ad channels) were flat for the second quarter running (net 0.0% change). Within main media, there was a mixed picture: digital video marketing spend rebounded (+6.7%), but traditional print, audio, and out-of-home advertising continued to decline (net balances of -6.2%, -13.0%, and -15.2% respectively in Q3). Sales promotion budgets also swung into decline for the first time in two years (-0.9% net) after a previously strong Q2. The overall pattern suggests marketers are cutting back on broad-brush promotional spend and struggling media channels, while channeling funds into targeted and engagement-led tactics. PR, along with direct marketing and events, benefited from this reallocation as companies aim to shore up brand loyalty and lead generation in a cost-conscious way.
PR’s Growing Role in a Challenging Climate
The sustained rise in PR expenditure underscores the evolving role of public relations within the marketing mix. Once viewed primarily as a tool for managing reputation and press coverage, PR is now being leveraged for tangible business growth outcomes. “The latest IPA Bellwether Report highlights steady but modest growth for PR budgets at +2.5%, reflecting its continued importance for brands navigating today’s challenges,” observed Amy Garrett, UK president at Weber Shandwick. “PR efforts are increasingly being valued for their ability to engage specific audiences through carefully crafted messaging and strategic outreach. It’s no longer just about reputation. PR now plays a significant role in driving leads and conversions, helping businesses focus on targeted approaches like lead generation and customer engagement. In an uncertain economic climate, PR remains a trusted tool for building relationships, delivering measurable results, and driving meaningful impact.”
In practical terms, this means in-house marketing teams and their agencies are using PR not only to burnish the brand image, but also to support sales and customer retention goals. By creating compelling content, securing media coverage, managing social communications, and orchestrating events or thought leadership, PR can directly bolster a company’s credibility and visibility in ways that advertising sometimes cannot. The Bellwether data shows that even as total marketing budgets remain under pressure, companies are reluctant to cut PR spend – instead, many are shifting budget into PR for its cost-effectiveness and its ability to speak to stakeholders (customers, employees, investors) with tailored messaging. This reflects a broader trend of brands seeking high-engagement, lower-cost marketing avenues in a time of economic uncertainty. As Garrett notes, PR’s strength lies in targeting specific audiences and building trust, which is especially valuable when consumer confidence and attention are harder to earn.
Another factor driving PR’s resilience is the environment of heightened scrutiny and stakeholder activism. In a year marked by geopolitical tensions, inflation, and fast-moving social media discourse, companies have faced numerous communication challenges. Many have leaned on their PR teams to handle issues like corporate layoffs, supply chain crises, or public stances on social issues – areas where advertising is less suited but thoughtful PR can make a difference. This may be contributing to why PR budgets have seen consistent upticks over the past two years. PR is not immune to cuts, but its perceived value in managing both opportunities (product launches, market expansions) and risks (reputation threats) appears to be convincing finance teams to maintain or slightly increase PR investment even when other budgets get trimmed.
The emphasis on targeted, relationship-based marketing is also evident in the surge in event marketing spend. With events budgets up by an impressive net +10.9%, firms clearly recognize the power of face-to-face interactions and experiential marketing after years of pandemic disruptions. Industry observers note that events and PR often go hand-in-hand – for example, a company might host client forums, trade show presentations or community outreach events (boosting event spend) and use PR to amplify those engagements through media coverage and social content. “We are starting to see more clients discuss and commit to events, particularly activations that allow them to engage directly with the consumer,” commented Kerry McDonald, CEO of agency Orchard, in the Bellwether release. This integrated approach, combining live experiences with strategic communications, is a hallmark of how marketers are trying to do more with limited budgets – focusing on channels that can drive deeper connections and yield measurable business leads.
Business Confidence Turns a Corner
Encouragingly for the UK marketing community, corporate confidence is rebounding alongside these budget increases. In Q3 2025, Bellwether respondents on balance felt positive about their own company’s financial outlook for the first time in over a year. Just over 25% of companies said they are more optimistic about their financial future than in the previous quarter, outweighing the 22.8% who felt more pessimistic. This produced a net confidence balance of +2.9% – modest, but significant as the first positive reading since Q2 2024. It marks a notable shift from earlier in 2025, when gloom pervaded boardrooms and many firms braced for a potential recession. Now, after navigating a “soft beginning of the year” and seeing some economic indicators improve, businesses are tentatively upbeat that the worst may be behind them. “Most notably, the latest Bellwether data reveals renewed optimism at the company level, with respondents expressing positivity for the first time in five quarters. Despite ongoing economic challenges, this shows that businesses have adapted by seeking out new opportunities for growth,” said Maryam Baluch, economist at S&P Global Market Intelligence and author of the Bellwether report. In other words, companies have adjusted to the uncertainty – whether by cutting costs, pivoting to new markets, or rethinking strategy – and are starting to feel a bit more confident about their ability to weather the storm.
However, this improving sentiment is cautious and not universal. Crucially, marketers remain pessimistic about the wider industry and economic environment, even if they feel okay about their own firms. The Bellwether survey found a net balance of -24.0% of respondents negative about industry-wide financial prospects in Q3. Over one-third (33.9%) of marketing executives foresee an industry downturn ahead, while only about 10% are optimistic about the broader market’s fortunes. This deep pessimism eased slightly compared to the previous quarter (it was -26.2% in Q2), but it underscores that many see storm clouds still looming on the horizon for the marketing and advertising sector as a whole. High inflation, rising interest rates, and geopolitical uncertainties have created a tough backdrop, and even as companies find ways to keep investing in marketing, they know the recovery is fragile. “It still indicated a heightened level of pessimism regarding the financial outlook of the industry more broadly,” the report noted of the negative industry sentiment, with concerns that persistent economic headwinds could yet undermine marketing spend if conditions worsen.
Those headwinds are very real. UK businesses in 2025 have been squeezed by a combination of factors: soaring payroll costs (with a tight labor market and wage inflation), domestic political uncertainty (as policy shifts and a potential general election approach), geopolitical instability abroad, and the lingering impacts of high inflation and borrowing costs. Even though the UK economy has narrowly avoided recession and actually saw slightly better-than-expected growth in the first half of the year, confidence has been brittle. S&P Global upgraded its UK GDP growth forecast for 2025 from 0.8% to 1.3%, reflecting a somewhat improved outlook, and forecasts 1.1% growth in 2026. Yet these figures remain subdued by historical standards, and the advertising market is not outpacing them by much. Total UK ad spend is forecast to grow only 0.6% in 2025 – essentially flat in real terms and far below the long-term average growth rate around 2%. In fact, the Bellwether report has revised down its ad spend growth prediction for 2026 to 1.2% (from an earlier 1.6%), anticipating that many of the current challenges – from inflation to geopolitical strains – will persist into next year. This “squeeze” on ad budgets means marketers will likely continue feeling pressure to justify every pound, prioritize spend that can prove return on investment, and remain ready to pivot if economic conditions take a downward turn.
Global Context: Cautious Optimism and Shifting Strategies Worldwide
The trends observed in the UK are part of a larger global story in marketing and PR. Around the world, marketing leaders have been grappling with similar dilemmas: how to maintain growth and brand visibility amid economic uncertainty and changing consumer behavior. Survey data from other markets suggests a mix of resilience and caution. For example, a Gartner survey of over 400 chief marketing officers across North America and Europe found that, going into 2025, marketing budgets as a share of company revenue have flatlined at just 7.7%, the same level as the prior year. This indicates that many organizations internationally are keeping marketing spend on a tight leash. “While marketing budgets have stabilized, marketing spending has stalled at a level that falls short for many CMOs,” said Ewan McIntyre, Chief of Research at Gartner’s marketing practice, adding that with macroeconomic uncertainties looming, CMOs are bracing for the possibility of in-year budget cuts if needed. In other words, even outside the UK, purse strings are only being loosened cautiously – marketers are finding incremental ways to increase effectiveness without significantly increasing spend, and they remain ready to trim budgets if economic signals turn south.
Despite these constraints, the global PR industry remains on a growth trajectory. PR is increasingly recognized as a vital function for organizations navigating complex social and media landscapes. The worldwide PR market is projected to be valued around $113 billion in 2025, and is expected to expand roughly 6% annually through 2030. This steady growth outlook reflects sustained demand for communication expertise across all regions. In fact, industry leaders around the globe express guarded optimism about the future of PR. According to the International Communications Consultancy Organisation’s latest World PR Report, 67% of PR agency leaders worldwide are optimistic about market growth in the coming year, and about 61% expect their firms to be more profitable over that period. This optimism exists in spite of economic pressures – a testament to PR’s resilience and adaptability. However, it’s not without challenges: the same global survey found that the top concerns for PR professionals are clients’ unwillingness to commit bigger budgets (cited by 37% of respondents) and general economic uncertainty (34%) making planning difficult. In essence, PR executives around the world feel confident in their ability to deliver value, but they acknowledge that convincing cautious clients to invest more in communications can be an uphill battle when CEOs and CFOs are nervously watching the macroeconomic indicators.
Another international trend boosting PR’s prominence is the emphasis on trust and credibility. In many countries, consumers are expressing lower trust in advertising and higher expectations of corporate behavior. This puts public relations – with its focus on earned media, authentic storytelling, and engagement with communities – at the forefront of building brand trust. It’s a point not lost on marketers: even as they diversify their channel mix, many are investing in PR as a way to differentiate from competitors and connect with audiences on a deeper level. The Bellwether report’s findings of brands reallocating spend into PR, events, and direct engagement methods is mirrored in other markets where digital ad fatigue and privacy changes are pushing marketers to rethink how they earn attention. For instance, in the United States, recent surveys have noted marketing spend is gradually rebounding but with a tilt toward digital and customer experience efforts. U.S. marketing spend grew about 5.8% in the past year and is projected to rise further, yet CMOs complain that their budgets still aren’t keeping pace with overall company growth, forcing them to prioritize initiatives that can drive quick revenue wins. When cuts do happen, marketing often takes an outsized hit – nearly 45% of the time executives will cut marketing first when targets are missed. This reality makes the case for efficient channels like PR stronger; PR can often achieve goals like brand awareness or customer engagement at lower cost than paid advertising.
Finally, global economic conditions in late 2025 present a mixed picture that informs marketing strategies. Many Western economies have shown resilience – the U.S. and parts of Europe continued to grow, and inflation has started to moderate – but growth is slower than pre-pandemic norms. Emerging markets have their own challenges and opportunities, from China’s economic adjustments to dynamic markets in MENA and Latin America. Marketers worldwide are thus balancing optimism in their own innovation and adaptability with realism about external risks. As the ICCO World PR Report put it, the industry is “confident in its resilience” but still facing financial pressures and client budget constraints that require proving ROI time and again. In this context, the UK’s experience – slight budget growth, focus on targeted marketing, cautious optimism – is not unique, but it is instructive. It shows how an industry can incrementally bounce back by shifting to smarter strategies (like prioritizing PR and customer-centric tactics) even when the economic tide is not fully favorable.
Outlook: Balancing Optimism with Prudence
Going forward, it appears that marketing and PR professionals will continue walking a tightrope between confidence and caution. The recent uptick in PR spending and overall marketing budgets is a welcome relief after a period of cuts and stagnation. It signals that companies, at least in the UK, recognize the need to invest in brand and customer relationships to drive growth – they “continue to recognise the value of advertising” and marketing even when times are tough. The hope is that this investment will pay off in competitive advantage and market share, especially for those who maintain brand-building activities rather than falling into short-term cutbacks. Industry leaders like IPA Director General Paul Bainsfair stress that “to drive meaningful results, advertisers need to think big… Scale really does matter, which is why investing in big, brand-building media remains so important.”
At the same time, nobody is declaring victory over economic challenges just yet. Marketers must remain agile and justify their expenditures. The positive trends in Q3 could be easily derailed if inflation spikes again or if a major geopolitical event unnerves markets. The lesson from both the Bellwether report and global surveys is clear: measure what works, focus on strategic priorities, and be ready to pivot. In practical terms, that means continuing the current approach of targeting spend where it counts – on initiatives that drive engagement, loyalty, and long-term brand equity – while trimming the fat from less effective tactics. If PR continues to deliver in areas like lead generation, conversion, and trust-building, it’s likely to hold or even expand its share of the marketing budget in the future. And if companies follow through on their newfound optimism by investing in innovation and expansion (as some hinted, using marketing as part of “expansion initiatives such as entries into new markets”), we could see a virtuous cycle where better financial results enable further marketing spend, which in turn fuels more growth.
For now, cautious optimism is the mantra. PR and marketing teams should take heart that their work is proving its value – the budget increases are one tangible vote of confidence from the C-suite. But they should also be prepared to keep proving that value, with data and results, to protect those budgets when the next round of belt-tightening comes. The remainder of 2025 and the start of 2026 will test whether the momentum can be maintained. As brands plan for the year ahead, many will do so with a slightly sunnier outlook than a year ago, yet with contingency plans in hand. In short, the forecast calls for growth, but with plenty of partly cloudy skies in the mix. The organizations that navigate this environment best will likely be those who continue to invest in smart, strategic marketing and PR – building their brands and engaging their customers – while keeping a watchful eye on costs and a nimble approach to adjusting tactics. In an era where every marketing dollar (or pound) must work harder, the recent rise in PR spending suggests that businesses see it as money well spent. The challenge now will be to maintain that belief by delivering meaningful impact that drives business forward, no matter what economic twists and turns lie ahead.