UK adspend rose 8% to reach £10.6bn in Q1 2025

Total adspend forecast to increase by 6.8% to £45.4bn for FY2025.

London, July 29, 2025: The latest AA/WARC Expenditure Report reveals UK advertising spend rose 8% to a total of £10.6bn in the first three months of 2025, +1.4 percentage points (pp) ahead of the April forecast. Data shows this increase was predominantly caused by an improved performance for search (including retail media) (+12.3%).

The UK advertising market is forecast to grow by 6.8% this year to £45.4bn, a slight increase (0.4 pp) since the April forecast. While AA/WARC expects the UK’s overall GDP growth to remain relatively flat at 1.1% in 2025, UK adspend is still expected to see 3.5% growth, after inflation. Channels expected to make gains in 2025 include TV Video-On-Demand (VOD) (+10.1%), search (+9.4%), online display (+9.2%), cinema (+9.0%), out of home (+3.1%) and radio (+1.2%).

Despite ongoing economic challenges, including a recent jump in UK inflation to 3.6%, both consumer and business confidence in the UK have shown an improvement in June.

Looking ahead, AA/WARC’s forecast remains unchanged for 2026, with the advertising market expected to grow 5.6% to reach £48.0bn. According to the AA’s recent report Advertising Pays 2025, advertising accounted for 4% of total UK GVA in 2024, reinforcing its value as a key driver of economic growth.

Q1 in Depth

Results for Q1 were led by an improved outcome for search (including retail media) (+12.3%) and strong growth for online display (+10.1%, including social media on +14.7%). Both channels benefited from budgets being brought forward in the quarter, particularly as advertisers sought more short-term solutions during uncertainty caused by the period of negotiation of the US administration’s trade deals. While there is more certainty in the UK economy now a trade deal has been secured, global macroeconomic headwinds persist.

Media channels which saw a positive Q1 2025 include cinema (+19.2%), online radio (+16.4%), search (+12.3%), online display (+10.1%),TV VOD (+5.4%) and direct mail (+3.6%). Big budget releases for cinema earlier this year included titles such as Bridget Jones: Mad About The Boy and Captain America: Brave New World, while Mufasa: The Lion King and Wicked continued to perform well in the new year.

Similarly, online radio has been showing strong double-digit growth over the last four quarters as radio listening continues to benefit from new technology.

Stephen Woodford, Chief Executive, Advertising Association said: “Further growth in the first quarter of 2025 is welcome, particularly following the launch of the UK Government’s new industrial strategy which recognises advertising as a priority sector.

The announcement that brand advertising will be exempt from the incoming Less Healthy Food restrictions has also provided important clarity for advertisers, ahead of the industry’s agreement to implement these from October 2025.

With our latest Ad Pays 2025 report showing advertising supports 1.7 million jobs, we will continue to monitor advertising expenditure and work with Government to highlight advertising’s contribution to the UK economy.”

James McDonald, Director of Data, Intelligence & Forecasting, WARC, said: “The latest survey data highlights buoyancy in certain corners of the UK ad market, with total investment growing just ahead of forecast despite a wavering economy and a sustained period of global trade turbulence. Advertisers were seen to pull budgets forward and double down on agile formats within search, social, and retail media in response to the volatility sparked by new US tariffs. Brands appear to be adapting to the current environment by reallocating budgets tactically, with the outlook for the year remaining broadly positive despite persistent headwinds.”

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.