UK advertising investment climbed to a record £46.7bn in 2025, as rapid growth in retail media, social platforms and addressable TV reshaped the market – though regional news brands continued to see falling revenues.
New figures from the Advertising Association and WARC show total spend rose 6.4% year-on-year, with £12.9bn committed in Q4 alone during the crucial festive trading period.
The updated Expenditure Report also introduces changes to how the industry is measured, with retail media and social media now reported as standalone channels for the first time, reflecting shifts in how advertisers are allocating budgets.
Northern-facing sectors show mixed picture
While the topline growth paints a positive picture for the wider UK market, the data highlights ongoing challenges for parts of the media ecosystem with strong regional footprints.
Regional news brands saw ad revenues fall by 6.0% year-on-year in 2025 to £411.9m, with a further 2.0% decline forecast for 2026. Even digital revenues within regional news dropped 2.2% last year, underlining continued structural pressures on local publishers across the North and wider UK.
By contrast, out-of-home grew 2.3% to £1.43bn, with digital out-of-home rising 3.0% and forecast to accelerate further.
Radio, another medium with significant regional reach, also saw modest growth of 1.4% to £747.3m, with online radio surging 14.9%.
Retail media and social surge ahead
The biggest gains came from digitally-led channels, many of which are increasingly shaping campaign strategies for brands targeting regional audiences at scale.
Retail media grew 17.5% to £3.75bn in 2025, including a 30.5% surge in Q4 alone, making it one of the fastest-growing segments in the market.
Social media spend rose 21.0% to £11.5bn, accounting for nearly a quarter (24.7%) of total UK ad investment, while search remained the dominant channel overall, taking a 38.3% share with £17.9bn in spend.
Addressable TV – which includes BVOD, AVOD and other targeted formats – recorded the fastest growth rate of all major channels, up 37.0% year-on-year to £1.84bn, despite total TV spend declining 1.2% overall.
Q4 boost driven by festive demand
The final quarter of 2025 delivered particularly strong growth, with total ad investment rising 8.0% year-on-year.
Retail media (up 30.5%), addressable TV (26.9%) and social media (22.0%) all recorded double-digit increases during the festive period, while search rose 8.6%.
Out-of-home and radio also posted gains of 4.5% and 2.1% respectively.
Forecasts point to continued expansion
Looking ahead, the AA/WARC report forecasts further growth, with UK ad spend expected to rise 6.6% to £49.8bn in 2026 and 5.6% to £52.6bn in 2027.
The latest update is described as the first phase of a wider overhaul of the report, with future iterations set to explore emerging areas including influencer marketing, creator-led advertising and Gen AI-driven formats.
Stephen Woodford, Chief Executive of the Advertising Association, said: “I would like to thank all our stakeholders for their feedback, collaboration and active participation in this process. This evolution of the AA/WARC Expenditure Report will ensure the industry has the best possible information to guide understanding of investment across the UK advertising and media landscape, reflecting how dynamic and diverse that landscape has become.”
James McDonald, Director of Data, Intelligence & Forecasting at WARC, added: “The AA/WARC Expenditure Report has been a staple for practitioners for over four decades, and this latest iteration – developed in close consultation with industry stakeholders – ensures our investment benchmarks will continue to accurately reflect the pace of change in advertising trade for many years to come. The result is greater clarity and transparency around media investment in the UK, to the benefit of both the media industry and the public at large.”
