Direct fared better than most sectors in a quarter in which 28% of companies revised down their total marketing budgets.
Direct had suffered declines of 12% in both the previous quarter and the fourth quarter of 2009, which also exacted the biggest drop for total marketing budgets with a decline of 42%.
Mark Runacus, vice-chair of the IPA's direct marketing group and chief strategy officer at HS&P, said: "These slowing rates of decline do seem to suggest that the worst is over, and we should all be prepared for a new market to emerge from this recovery."
He went on to argue this is an opportune time for clients to spend money on direct: "Senior marketers should have courage, and reinvest now, particularly in accountable channels like direct and digital."
"I'm not a media planner but...I've heard some very exciting stories about how soft the media market is right now.
"So I think with accountability and the opportunity to get real bang for the proverbial buck I would want to be out there learning how the consumer landscape has changed because it certainly has and then I would be investing in those learnings to make sure I'm ahead of the curve."
Ian Stockley, managing director of Bristol-based agency Entire, credited digital direct activity with slowing the slide in budgets.
Stockley said: "The growth in DM applications within the digital media channel in Q2, more than compensated for the decline in revenues from traditional off line DM channels.
"As a result, the rate of decline has slowed significantly compared to the beginning of the year."