Budgets are still being cut, but by the smallest amount in more than a year, reflecting a more optimistic feeling among the advertising community about the economic outlook, the report said.
Weak sales are still causing advertisers to reduce budgets or shift spends into what are perceived to be more accountable media, such as direct marketing.
FMCG manufacturers and retailers have made the largest cuts, although car makers and public-sector advertisers have bucked the downward trend.
The findings suggest that for the first time in three years advertisers have not significantly readjusted their third-quarter budgets.
Researchers believe this may be because of the severe budget cuts they imposed earlier this year as a result of the Iraq war and reduced business confidence.
The survey of more than 200 UK-based companies by NTC Research on behalf of the IPA is in line with recent Advertising Association conclusions that the decline in adspend is bottoming out.
The IPA president, Stephen Woodford, said the report's findings were encouraging given the previous two years' third-quarter figures.