Most local businesses are about to make the same mistake. Trade is tight, money is watched, and the marketing budget is the first thing on the table. So you’ll either cut it or throw more at it. Both are a guess if you can’t say where your last ten enquiries actually came from. And most owners can’t. Open your analytics and the biggest single “source” is often the one labelled Direct, which is the tool politely telling you it has no idea.
Key takeaways
- UK marketing budgets are still rising. The IPA Bellwether Report (Q2 2026, published 16 July) shows a net +6.9% of firms raised spend, one of the strongest readings in two years, even as industry confidence slumped to -25.1%.
- The going benchmark, from Gartner’s 2025 CMO Spend Survey, is 7.7% of revenue. But a percentage tells you how much to spend, not whether it works.
- On most small business websites, Direct is often the biggest single “source” in Google Analytics, the bucket that means the tool can’t tell what sent the visitor. A big total is useless if you can’t split it.
- Before you touch the budget, run the Source Test: can you name where your last ten enquiries came from? If not, fix the measurement first.
Budgets are going up. Proof isn’t.
The number worth watching landed on 16 July: the IPA Bellwether Report, run every quarter by S&P Global for the Institute of Practitioners in Advertising. In Q2 2026, UK firms revised their marketing budgets up again. Nearly a quarter (23.8%) raised spend, against 16.9% who cut, a net +6.9% and one of the strongest readings in two years.
They’re doing it into a jittery market, too. The same report’s confidence gauge for the wider industry slumped to -25.1%, with more than a third of firms expecting conditions to get worse. So the money’s still flowing, even as owners feel the pinch. That’s the moment waste hurts most.
As for how much, the benchmark everyone quotes is Gartner’s: marketing at 7.7% of company revenue, flat two years running. Handy as a sanity check, though that figure leans on big corporates, so treat it as a loose guide. Either way, a percentage tells you how much to spend, not whether it works. Get your strategy and tracking straight first, and the budget question mostly answers itself.
Your biggest channel is probably “don’t know”
Here’s the uncomfortable part. On a lot of small business websites, Direct is the biggest single “source” in Google Analytics. It sounds like a channel. It isn’t. It’s the junk drawer of your analytics: people who typed the URL, tapped a bookmark, clicked an untagged link in an email or a PDF, or arrived with their referrer stripped by a browser.
For a lot of businesses that drawer holds a serious chunk of their traffic, and every visitor in it turned up without telling you what sent them. We see it constantly, on the accounts we run and on our own. A big total is useless if you can’t split it into what worked and what didn’t.
Direct isn’t a channel. It’s the junk drawer of your analytics, and for most Chester businesses it’s the biggest drawer they’ve got.
Volume flatters. Enquiries don’t
Big traffic numbers make everyone feel good. They also lie. The channel that looks loudest by visits is often the quietest on actual enquiries, and a small, easily-ignored channel can be the one booking real work. Judge by sessions alone and you’ll back the wrong horse.
AI search is the sharpest example right now. Judge it on visit counts and you’ll write it off, but a growing share of searches now end inside an AI answer with no click at all. That’s influence a sessions report will never show you. Counting heads at the door tells you nothing about who actually bought.
The Source Test
One question, and we’ve started calling it the Source Test: can you name where your last ten enquiries came from? Not “the website”. Not “word of mouth”. The actual source. If you can’t, don’t touch the budget yet. Fix the plumbing.
Five things that shrink the don’t-know pile, most of them an afternoon’s work:
- Turn on real conversion tracking. Calls, forms and bookings, not just page views.
- Tag every link you send. UTMs on your emails, your social posts, the QR code on the van. Watch Direct start to shrink.
- Put one number on each channel: cost per enquiry. Not clicks. Enquiries.
- Ask every new caller how they found you, and write it down.
- Review it monthly and move the money towards whatever books actual work.
Do that and paid channels finally earn their keep, because you can see what each pound returns. It’s the same logic behind our results guarantee: if we can’t measure it, we won’t promise it.
To be fair to Direct
Some of that unknown pile is good news, not bad. Returning customers, people who trust you enough to type your name, referrals who never touched a search bar. A chunk of Direct is loyalty, not mystery. And perfect attribution doesn’t exist any more; privacy changes killed some of it for good.
True. But “some of it is loyal” is no reason to fly blind on the rest. You can shrink the unknown a long way with the list above. Most owners never try.
It matters more this year than last. Constant Contact’s June report found 54.9% of UK shoppers have cut back spending at small businesses over the past year. When customers are that careful, wasted marketing hurts twice.
The firms that come through a tight year aren’t the ones who spent the most. They’re the ones who knew what their money did. Spend less if you have to. Just spend it where you can see it land.
Sources and method
- IPA Bellwether Report, Q2 2026, produced by S&P Global Market Intelligence for the IPA, published 16 July 2026.
- Gartner 2025 CMO Spend Survey, 12 May 2025: gartner.com
- Constant Contact, “Small Business Now” Q2 2026 UK report, 10 June 2026: constantcontact.com
