In the first quarter, the net balance of companies reporting an increase in budgets was -34%, which compares to the record low reading of -42% in the fourth quarter of last year.
Moray MacLennan, the IPA president, said: "This data supports the view that the bottom of the market has been reached. It will be a long road to full recovery, but this maybe the turning point. It's good to see a graph going in the right direction for a change."
Business confidence has also picked up, with the percentage of companies believing their prospects have improved rising from 5% to 14%.
But the author of the report, Chris Williamson, warned it was unlikely that 2009 would turn out to be a good year for the industry.
Williamson, the chief economist at Markit, said: "The Bellwether raises hopes that a bottom was reached in Q4 and that the rate of budget cutting will ease as we move through 2009.
"Any return to growth looks a long way off, however, and is unlikely to be seen this year, as expenditure on all types of marketing and advertising continues to fall at rates that were unprecedented prior to last autumn."
Internet advertising suffered a record reduction in spend as a net balance of 10% of companies cut their budgets, but it is still dropping at a lower rate than total marketing spend.
The worst hit sectors were main media advertising and the 'all other' category, which includes PR, event sponsorship and market research.