Latest forecasts also project total ad spend will top £46bn in 2025
UK advertising spend is expected to increase by 7.3% to a total of £12.0bn in the final quarter of this year, according to the latest Advertising Association/WARC Expenditure Report. The new forecasts, published today, also show that total ad spend is set to rise by 8.2% to £46.0bn during 2025 as a whole and a further 6.6% to almost £50bn (£49.1bn) in 2026.
Festive ad spend
The advertising market is predicted to see an £814m boost compared with the same period in Q4 2024, with advertising continuing to play a vital role in supporting economic growth during the Christmas season.
The UK’s biggest brands are set to unveil their festive campaigns in the coming weeks, driving activity across a range of channels including online formats and Video on Demand (VOD). VOD is forecast to see the largest boost, with spend rising 17.2% year-on-year to £430m in Q4. However, fluctuation is expected in the total TV market due to a decrease in advertiser confidence, dampened by economic uncertainty.
On the high street, cinema (3.7%) and out of home (3.1%) will benefit from festive footfall, with smaller rises also anticipated in direct mail (0.5%) and radio (0.5%), highlighting the significance of Christmas for advertisers and the subsequent benefits to the wider economy. Altogether, online formats are expected to account for 83% of all ad spend during the Golden Quarter, with 40% for search (including retail media) alone.
Reflecting on Q2 2025
The latest figures include actual results collected from media owners for Q2 2025, which shows ad spend rose 9.1% to £11.3bn. Data shows that VOD was the fastest-growing channel, up 23.2% year-on-year to £373m in Q2, whilst cinema had a strong quarter (+19.7%) thanks to releases in April to June including A Minecraft Movie, Lilo & Stitch and Mission Impossible – The Final Reckoning.
Online radio saw double-digit growth, with ad spend increasing by 11.2%, while online magazine brands (4.4%) and direct mail (4.8%) also posted gains during the quarter.
In the first half of 2025 (H1), ad spend increased by 8.9% to £22.0bn. WARC estimates that search and online display formats (including retail and social media) accounted for just over 81% of total ad spend, rising to £17.9bn. This is due, in part, to ongoing investment in AI to drive efficiencies and performance improvement across advertising platforms.
Expectations for FY 2025 and FY 2026
Looking ahead, AA/WARC expects growth to moderate slightly in the second half of 2025 (H2), leading to an increase of 8.2% for the year as a whole. In 2026, UK ad spend is forecast to increase by 6.6% to £49.1bn, with TV expected to return to growth (5.8%) alongside a further increase for radio (2.4%). Online formats are expected to record further growth, with search and online display up 9.2% and 6.7%, respectively.
Despite positive results in the UK’s ad market, the latest report shows business and consumer sentiment has fallen since early summer, with concerns around potential tax increases in November’s budget and above average inflation likely to further undermine confidence.
Stephen Woodford, CEO, Advertising Association, said: “The Christmas advertising season is the key time for brands to inspire shoppers and win share in this critical retail period.
“Our Advertising Pays 2025 report shows every £1 spent on advertising returns £4.11 in profit for medium to large businesses and £1.89 for micro-small businesses, underscoring the importance of advertising investment especially during the festive season. Despite ongoing economic uncertainty and caution in the run up to the November budget, the advertising market is still expected to see growth next year.”
James McDonald, Director of Data, Intelligence & Forecasting, WARC, said: “The latest AA/WARC forecasts show advertisers continuing to tap into consumers’ digital consumption habits, with online formats now accounting for four in every five pounds spent on advertising in the UK. Growth in video on demand services and search – particularly on retail platforms – underscores a prioritisation of digital engagement and its influence on the path to purchase.
“Looking ahead, advertising investment is forecast to rise steadily into the Golden Quarter, and while overall growth is expected to moderate slightly in 2026, the latest figures suggest a stable trajectory for the UK’s ad market despite a languid economy.”
For HY 2025, IAB UK has partnered with Oliver Wyman to deliver its Digital Adspend study. This new collaboration introduces an updated methodology, with all reported data beginning from HY 2025. As a result of this methodological change, it is not possible to reconcile data for search, online display and online classifieds with previous editions.
The quarterly Advertising Association/WARC Expenditure Report is the definitive guide to advertising expenditure in the UK, with data for all key advertising media and sub formats dating back to 1982 and forecasts spanning eight quarters ahead.
