The latest Advertising Association/Warc Expenditure Report, released today, reveals that advertising investment in the UK rose by 10.4% in 2024, reaching a total of £42.6 billion.
The latest dataset shows online formats, when combined, grew 13.2% last year with £4 in every £5 of ad budgets now spent online.
New AA/Warc forecasts show advertising is expected to rise by 6.3% to reach £45.2bn in 2025. Further growth is forecast for 2026, with an anticipated rise of 5.6% lifting the UK ad market’s value to £47.8bn next year. April’s forecasts have seen a slight downgrade from January’s predictions, factoring in a possible destabilising effect from the US trade tariffs on the wider global economy and a tougher economic backdrop leading to uncertainty in the advertising market.
2024 Overview
While the UK ad market grew 10.4% in nominal terms in 2024, this translated to a real term rise of 7.6% once inflation was accounted for. This growth was well ahead of the UK economy generally; GDP increased by 1.1% last year, while inflation persists.
Channels that saw a boost in spend during 2024 included online display, which gained an overall increase of 15.1%. This included social media, which accounted for 53% of overall online display, and retail media, which grew 22.7% year-on-year in 2024.
Total TV spend grew by 3.8% to a total of £5.3bn last year and the category has been newly redefined to include more video services. Previously, only broadcaster VOD (BVOD) was included within the VOD component of TV, but monitoring has been expanded to include ad-supported subscription video on demand (SVOD) such as Disney+, Netflix and Prime Video, advertising-based video on demand (AVOD) and FAST (free ad supported streaming TV).
Elsewhere, growth was again recorded in the search sector last year, with spend rising 12.8% to a total of £16.9bn. Search, including retail media platforms, accounted for two in five pounds spent on advertising in the UK last year. Out of home (OOH) (+7.7%), radio (+3.2%) and direct mail (+0.8%) all saw net gains in ad billings in 2024.
The latest figures also reveal the results of last year’s Christmas advertising season, which saw a 9.1% increase from the previous year. Search (+12.5%), online display (+15.4%), TV VOD (+23.2%) and cinema (+24.2%) were seen to have benefitted most from additional festive spend. Cinema’s strong final quarter was buoyed by a slate of well received films including Wicked, Gladiator II and Paddington in Peru.
Projections for 2025 and 2026
AA/Warc expects the UK advertising market to grow by 6.3% to reach £45.2bn this year, representing a 0.6 percentage point (pp) downgrade from January’s forecast and reflective of a toughening trading climate. Search (+8.2%) and online display (+9.1%) are set to continue recording gains, albeit at a slower rate than the recent years of double-digit growth, while cinema (+7.1%), out of home (+2.7%), radio (+1.9%) and TV (+0.9%) are still expected to end the year in positive territory.
The UK’s ad market is set to rise by a further 5.6% in 2026, by when it would be worth £47.8bn. TV is expected to grow to a total of £5.5bn in 2026 – a World Cup year – with VOD accounting for a third (32%) of all TV spend by the end of the forecast period. Search and online display – inclusive of retail and social media – are set to account for over 80% of the UK ad market at that time.
Stephen Woodford, CEO, Advertising Association, said: “While the UK advertising industry growth is well ahead of UK growth, it’s worth noting business confidence may weaken due to geopolitical headwinds and regulatory uncertainty, which could impact on the way businesses commit to spend on advertising. However, it’s important to remember once again that advertising supports competition and promotes innovation, and helps to create jobs across the UK, so a healthy advertising sector is integral to a healthy economy. The UK advertising market is constantly dynamic, with these latest figures recording the rise of retail media and the growth of advertising opportunities from video-on-demand, reducing cost of access to TV content for people.”
James McDonald, director of Data, Intelligence & Forecasting, Warc, said: "Though we expect investment to grow in the coming years, we are cognisant that confidence in the UK’s advertising market remains fragile, burdened by sustained economic stagnation and recently introduced business taxes outlined in the Autumn statement. The introduction of new trade tariffs by the Trump administration adds further complexity, particularly for sectors with high exposure to international supply chains.
“At worst, such disruption stands to erode margins, with any increase in operational costs for businesses potentially translating to higher prices at the till. The temptation to cut ad budgets in such a climate will be elevated, therefore, but Warc research clearly demonstrates that short-termism poses an inordinate risk to enduring brand equity.”
A complimentary sample of this latest report is available here.
