We've been spending a fair bit of time lately digging into individual advertising companies on both sides of the Atlantic. But it's worth zooming out for a minute, because advertising as a sector is a genuinely interesting one to watch globally, and not just for the companies in it. It's one of the more useful real-time reads on business confidence the economy gives us, if you know how to read it.

So let's have a proper look: how's advertising doing right now — globally, and in the UK and US specifically — how does it tend to behave through good times and bad, what actually moves it, and is any of this worth getting excited about yet?

How's it doing right now?

Better than you might expect, honestly. On eMarketer's measure, global media ad spend is on track to reach roughly $1.17 trillion in 2026, with the US accounting for just over 40% of that. Growth is broad-based rather than concentrated in one region, and it's coming from a healthy mix of digital and, unusually, a decent year for traditional channels too.

Zoom into the two markets we cover most and the picture holds up in both, for slightly different reasons. (Worth flagging: the global and US figures below come from different research houses using different definitions of "advertising spend," so they're not directly comparable dollar-for-dollar — each is more useful for its own trend than for cross-checking against the other.)

In the US, on the broader Winterberry measure, total advertising, marketing and data spend is projected to reach around $664 billion in 2026, up roughly 9.4-9.5% year-on-year. A chunk of that is being pulled forward by a genuinely stacked events calendar — the World Cup, the Winter Olympics and the midterm elections are all expected to add billions in incremental spend between them — while digital channels keep taking share from linear TV and print.

In the UK, marketing budgets have been holding up nicely too — companies revised them up to the second-highest level in two years in the most recent quarter, with roughly a quarter of firms increasing spend against under a fifth cutting it. Advertising and market research output rose 3.2% in May, its sixth consecutive monthly increase, and the latest ONS figures show the industry up 4.3% over the three months to June.

The bigger holding companies are seeing it on both sides of the pond. Publicis posted growth close to 5% in its most recent quarter and raised its full-year guidance on the back of it. Omnicom, now merged with IPG, put up over 6% growth — its Experiential division got a particular World Cup boost, while its Integrated Media division also grew strongly. So at the big-picture level, advertising is genuinely growing again, in both markets.

Not every company's feeling it evenly, though. S4 Capital, a UK-listed name we've been tracking closely (report here), is still seeing its own revenue shrink even while the wider market grows — a useful reminder that the recovery isn't lifting every boat at once, wherever that boat happens to be listed. More on that later.

How advertising behaves through the cycle

This is the bit that makes advertising worth watching even if you don't own a single ad stock. It has a fairly consistent personality across economic cycles, and it's not a subtle one.

It reacts fast when fear arrives — and it's often slower coming back. Advertising and marketing budgets are seen internally as discretionary, so when a company's worried about the next twelve months, marketing is one of the first lines cut, often before headcount or capex. But cutting fast doesn't mean reopening the taps just as fast: companies can slash budgets in weeks but tend to stay cautious for a while after growth actually returns. Sir Martin Sorrell, back when he ran WPP, put it neatly: advertising "leads into the downturn and lags the upturn."

The numbers back him up. In the 2008 financial crisis, advertising fell much harder than the wider economy — global ad spend dropped roughly 10% in 2009 (estimates vary by dataset, from around 9.5% up to nearly 13%), several times the scale of the GDP contraction, and agency revenues took years longer to recover. Go back further and it's the same story: US advertising spend roughly halved between 1929 and 1933 during the Great Depression.

Covid was a different animal — a genuine black swan rather than a normal cycle. Global ad spend fell around 9-10% in 2020 as travel and automotive pulled back hard, but because the shock was sudden and stimulus was massive, the rebound was unusually violent: spend surged close to 24% in 2021, the strongest growth in WARC's four decades of monitoring, clearing pre-pandemic levels within about a year — far faster than after the financial crisis.

Wars and geopolitical shocks work more like a dimmer switch than an on/off button — they don't collapse the whole market the way a pandemic does, but they inject caution into specific, exposed pockets. S4 Capital's own recent results pointed to the Middle East conflict as one factor behind client caution this year, alongside the much bigger structural issue of tech firms shifting money from marketing into AI infrastructure spending instead. Not every headwind is macro — sometimes it's a specific industry redirecting its budget somewhere else entirely.

Why advertising is a useful economic tell

Plenty of people use advertising as an informal read on business confidence, even though it isn't one of the standard official leading indicators like the yield curve or jobless claims. The logic is simple: marketing spend is one of the more sensitive lines on a company's income statement to how confident management feels about the near future, and much of it can be adjusted quickly. So when ad spend starts slowing across a broad range of sectors, it's often a sign that companies are quietly bracing for tougher conditions — sometimes before it shows up anywhere else in the official data.

Watching whether businesses are opening up their marketing budgets or quietly trimming them tells you something real about how they're actually feeling, rather than what they're saying in a results call.

Is it worth getting excited yet?

Honestly — not quite. Not because the data's bad, but because it's mixed, and mixed data is exactly the kind that needs more time to resolve rather than a quick verdict either way.

The macro numbers are genuinely encouraging on both sides of the Atlantic. But look closer and a few things temper the enthusiasm in each market. In the UK, main media advertising (the stuff that reaches consumers directly, rather than events or direct marketing) is where it gets more complicated — the headline growth rate slowed sharply in the latest budget survey, but underneath it, video actually accelerated to its strongest reading in seven quarters. So advertisers aren't simply opening the taps everywhere; they're being selective about where the money goes.

In the US, a similar question applies from a different angle: a meaningful chunk of the 2026 growth is being pulled forward by a stacked events calendar — the World Cup, the Winter Olympics, the midterms — which raises the question of how much underlying, durable growth is left once those one-off boosts roll off. And individual companies are not all riding the same wave regardless of geography — S4 Capital's revenue is still falling even as its bigger rivals grow, in part because its client base is unusually concentrated in tech firms currently diverting marketing budget into AI infrastructure instead.

So what data would actually move the needle? A few specific things:

  • Whether UK "main media" advertising reaccelerates, rather than the recovery being propped up mostly by events and direct marketing
  • Whether US growth holds up once the World Cup, Olympics and midterm effect fades, particularly into 2027
  • What the big US tech platforms say about their own marketing spend in upcoming earnings calls, given how much of the industry's fortunes are currently tied to whether they open the budget back up or keep funnelling cash into AI capex
  • Whether the smaller, more exposed agencies start showing revenue growth again, not just improved margins from cost-cutting — a distinction we've written about at length with S4

We're watching S4 Capital specifically as one real-time gauge here, precisely because it's the most exposed name to that tech-client dynamic — if the Q3 update on 28 October shows the revenue trend turning, that's a genuinely useful signal that the underlying client base is loosening the purse strings again, not just riding a broader tailwind.

Who else is worth watching if the recovery broadens out

If marketing and consumer spend genuinely pick up from here, a handful of other names become more interesting than they are right now:

In the UK: WPP, given the scale and breadth of its client base — its own recent chart action suggests the market's starting to price in some kind of turn.

Omnicom and Publicis aren't UK-listed but both have deep UK operations worth tracking. Smaller UK names like Next Fifteen Communications offer more direct exposure to a leaner, digitally-focused agency model.

In the US: The Trade Desk is probably the purest programmatic-advertising play — it doesn't own agencies; it runs the technology that buys ad space efficiently across the open web, so it benefits directly when digital budgets expand. Stagwell is a smaller, scrappier holding company building a modern, data-led model, worth watching if appetite returns for agencies outside the traditional giants.

None of these are recommendations — just names that sit closest to the trend we've laid out here, worth a watchlist spot rather than action today.

Worth a mention too: traditional UK media owners like ITV and Reach are indirect plays on the same theme — no agencies, but revenue heavily tied to TV and news advertising, so they move on similar signals with more exposure to the slower-growing parts of the market.

Ad budgets are also, indirectly, a read on what businesses think consumers are about to do — companies rarely spend aggressively into a market they expect to weaken.

The bottom line

Advertising is a genuinely useful lens on the wider economy, not just a sector to trade.

Right now it's telling a story of cautious, uneven recovery — real growth at the macro level, but not yet broad enough or confirmed enough to call it a clean, sector-wide turn. That's not a reason to ignore it. It's a reason to keep watching the specific data points that would actually confirm it, and to be patient about which individual companies are genuinely participating versus which ones are still waiting their turn.