UK advertising spend set to grow 7.3% in ‘critical’ final quarter

UK marketers are expected to spend £12bn on ads over the festive season as brands push for sales in the Golden Quarter.

Advertising spend in the UK is expected to increase by 7.3% to £12bn in the final quarter of 2025, a £814m boost compared with the same period in Q4 2024, according to the latest AA/WARC Expenditure Report.

The forecast, published today (30 Oct), also suggests total ad spend is set to rise by 8.2% to £46bn during 2025 as a whole, and by a further 6.6% to almost £50bn in 2026.

With the UK ad industry set to reveal their festive campaigns for 2025 in the next couple of weeks, it is video on demand (VOD) that is set to see the biggest boost in spend, rising 17.2% year-on-year to £430m in Q4.

It is not all good news for the overall TV market, however, which is expected to suffer a 5.2% decline due to a decrease in advertiser confidence in a “languid economy”.

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%).

There are projected declines in spend for online classified (-1.6%), national news brands (-2.9%) and magazine brands (-4.2%).

Brands reallocate budgets ‘tactically’ in Q1 to adapt to ‘wavering 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.

“The Christmas advertising season is the key time for brands to inspire shoppers and win share in this critical retail period,” says Stephen Woodford, CEO of the Advertising Association. “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.”

More growth to come

The forecast also included results from 2025’s Q2, indicating advertising spend rose 9.1% to £11.3bn. VOD (video on demand) was the fastest-growing channel, up 23.2% year-on-year, while cinema also had a strong quarter (19.7%) thanks to summer blockbusters like A Minecraft Movie and Lilo & Stitch.

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.

There were declines, though, for linear TV (-4.1%), OOH (-1.2%) and regional news brands (-7.8%).

Overall, in the first half of 2025, ad spend increased by 8.9% to £22bn, with WARC estimating that search and online display formats (including retail and social media) accounted for around 81% of total ad spend, rising to £17.9bn.

It attributes this to ongoing investments in AI to drive efficiencies and performance improvement across advertising platforms.

‘You don’t do it to get budget’: Marketers on the value of effectivenessLooking ahead to H2 2025, AA/WARC expects the market to moderate somewhat, resulting in an increase in ad spend of 8.2% for the year. In 2026, UK ad spend is set to rise again, with ad spend expected to increase by 6.6% to £49.1bn. This is despite the relatively flat picture which has emerged for consumer confidence for much of the past three years.

“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,” says James McDonald, director of data, intelligence and forecasting at WARC.

“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.”