A record £12bn is expected to be spent by UK advertisers over the festive period, increasing by 7.3% year on year.
According to the latest Expenditure Report released by the Advertising Association (AA) and WARC, total ad spend for 2025 is also expected to rise 8.2% to top £46bn in 2025.
Next year, ad spend is expected to increase by 6.6% to nearly £50 billion.
“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,” said Stephen Woodford, CEO at Advertising Association.
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“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.”
Jamie Peate, global head of effectiveness and retail at McCann Worldgroup and McCann Manchester, added: “2025 has been a toughie. The world is an uncertain and sometimes frightening place, the economic indicators look shaky, and everyone is feeling a bit gloomy when it comes to the cost of living.”
Although we’re still eagerly awaiting the big retailers and brands to release their Christmas campaigns, Peate expects familiar, well-loved characters will be gearing up to make an appearance on our screens again, whether it’s Sainsbury’s with BFG or McDonald’s with The Grinch.
“I think that means we might be on for a lot of light entertainment and less tear-jerking this Christmas. Why? Because we all need cheering up and we all need something that will make us feel good and provide a distraction, for the festive period at least.”
As Christmas ad spend is predicted to see a £814m boost this year, online formats and Video on Demand (VOD) appear to be the biggest channel winner with spend rising 17.2% year-on-year to £430m in Q4.
Despite this, the report suggests “fluctuation” is expected in the total TV market due to a “decrease” in advertiser confidence amid economic uncertainty.
On the high street, cinema (3.7%) and out of home (3.1%) will benefit from festive footfall, with smaller increases also anticipated in direct mail (0.5%) and radio (0.5%).
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 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,” said James McDonald, director of Data, Intelligence & Forecasting at WARC.
Reflecting on 2025 and looking ahead to next year
Total ad in the second quarter of 2025 increased by 9.1% to £11.3bn, with the report revealing VOD was the fastest-growing channel, up 23.2% year-on-year to £373m.
Cinema also had a strong quarter, up 19.7%, thanks to releases in April to June including A Minecraft Movie, Lilo & Stitch and Mission Impossible – The Final Reckoning.
Online radio increased by 11.2%, while online magazine brands increased by 4.4% and direct mail by 4.8%.
Across the first half of 2025, ad spend increased by 8.9% to £22bn. WARC estimated that search and online display formats (which includes retail and social media) accounted for just over 81% of total ad spend, rising to £17.9bn. It is suggested this is perhaps due to on-going investment in AI to drive efficiencies and performance improvement across advertising platforms.
Looking ahead to next year, ad spend is expected to climb 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.
“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,” said James McDonald, director of Data, Intelligence & Forecasting at WARC.
