A new industry report finds that UK digital advertising is booming. 

The latest half-year Adspend study shows digital ad spend hit £35.5bn in 2024, up 13% on the year. 

Building on that growth, digital ad budgets are forecast to climb roughly 10% a year and top £45bn by 2026.

Online ads, from search to social, are poised to drive the lion’s share of UK media spending.

Market Growth and Key Figures

According to the report, total UK digital ad spend reached about £18.7bn in the first half of 2025. 

This strong start underpins the optimistic forecast. 

For comparison, 2024’s total (£35.5bn) was already a record year, far outpacing UK GDP growth. 

Looking ahead, the Adspend report predicts a 10% gain in 2025 and another 10% in 2026, bringing digital ad spend to about £45 billion by the end of 2026.

The breakdown of H1 2025 spend reveals how advertisers are allocating budgets. 

Search advertising led the way, accounting for £8.3bn (44%) of spend. 

Video ads were the second biggest slice at £4.3bn (23%), with a large chunk of those video ads running on connected TV and streaming platforms (the category called ‘TV+’). 

Display banner ads added £2.9bn, while rising formats like online retail media hit £1.5bn. 

Other channels such as gaming, digital out-of-home, classifieds and audio, together added about £3.2bn. 

Notably, mobile devices drove the bulk of it all: 71% of the spend (about £13.3bn) went to ads on smartphones and tablets.

Key H1 2025 Digital Ad Spend by Channel

• Search advertising: £8.3bn (44% of spend)

• Video advertising (inc. TV+): £4.3bn (23%)

• Display advertising: £2.9bn

• Online retail media: £1.5bn (fastest-growing channel)

• Other formats (gaming, DOOH, classifieds, audio): £3.2bn combined

• Mobile platforms: 71% of all digital spend

Retail Media and TV+ Lead the Charge

Two emerging areas are powering much of the growth. 

Retail media (ads on retailer websites and apps) is now a mainstream channel. 

At £1.5bn in H1 2025, it has cemented itself as a core channel for advertisers. 

Brands are increasingly spending advertising money closer to the point of sale.

This is by placing ads on shopping sites and apps where people make purchases. 

This sector’s double-digit growth reflects its ability to drive measurable sales.

Similarly, TV+ (a term covering streaming and on-demand TV ads) is taking off. 

This form of AtL marketing now makes up more than a third of all video ad spend. 

Advertisers like TV+ because it offers the high-impact, brand-safe feel of TV combined with the flexibility and data of digital. 

TV+ is becoming a key part of digital advertising budgets.

Another crucial trend is programmatic buying. 

Automated, programmatic deals now account for 78% of all display ad spending. 

This means almost all banner and video ads are bought with algorithms in real time, underscoring that programmatic is now the norm in online ads.

Innovation, AI and Measurement Challenges

Alongside these growth areas, new technologies are reshaping the market.

This is not without concerns however. 

Generative AI tools are making it easier for smaller companies to create and personalise ads. 

They promise more efficient targeting and better creative optimisation in formats like retail media and audio. 

However, the industry is cautious. 

More than half of digital marketing leaders name AI and automation as a top challenge. 

Fears include a lack of transparency, overly similar ad creative, and over-reliance on algorithms.

Measuring ROI

Measurement is another sticking point. 

About a third of respondents say tracking effectiveness and getting standard metrics is a major challenge. 

This reflects ongoing fragmentation of digital channels and a complex landscape of devices and platforms. 

Advertisers are also navigating new regulations.

For example, upcoming restrictions on ‘less healthy’ food ads which complicate planning and compliance.

Despite these issues, industry leaders remain upbeat. 

Jon Mew, CEO of IAB UK, says the report highlights where the market is heading. 

He notes that with digital spend hitting £45bn by 2026, the UK ad industry is entering a new phase of maturity. 

Advertising in Britain has grown up: digital is now stable, sizable and full of diverse channels. 

Innovation in formats and tech, from retail media to audio to AI, will continue to drive growth and deliver for advertisers and audiences alike.

Broader Ad Market Context

It’s worth remembering that digital ads make up the vast majority of UK advertising now. 

The Advertising Association’s quarterly report (covering all media) shows overall UK ad spending is also on the rise. 

In Q1 2025, total adspend (TV, print, online, etc.) was £10.6bn – 8% higher than a year earlier. 

Analysts forecast the full-year 2025 total at £45.4bn (up 6.8% from 2024). By 2026, the total ad market is expected to reach about £48.0bn.

That means by 2026 digital (at ~£45bn) will constitute an overwhelming share of the total market. 

The UK ad industry is becoming almost entirely digital. 

This reflects global trends in which online formats dominate. 

It also underscores advertising’s importance: the sector accounts for around 4% of UK GDP and supports over 1.7 million jobs.

Channels driving the overall market include online video (especially streaming), search (including retail media), and social media. 

In 2025, forecast gains of +10% in TV Video-On-Demand (streaming), +9.4% in search, and +9.2% in online display are expected. 

Cinema, out-of-home and radio also see modest growth. Many advertisers have pulled budgets forward into 2025, focusing on flexible, short-term media amid economic uncertainty.

What This Means for Advertisers

For marketing professionals and businesses, the message is clear: digital is where the action is. 

Advertisers will likely continue boosting budgets in growing digital formats.

This is especially true in retail media networks, connected TV/streaming ads, and programmatic buying. 

Success will depend on balancing innovation with measurement. 

Brands will need to invest in analytics and new metrics to prove ROI in a fragmented media world. 

They will also watch regulatory and economic shifts closely.

On the positive side, continued growth means a robust advertising environment for businesses to reach consumers. 

With consumer and business confidence improving in mid-2025, advertisers are cautiously optimistic. 

The exemption of brand ads from upcoming food advertising rules has also provided clarity, according to the Advertising Association.

Key Takeaways

The latest Adspend report paints a picture of a confident UK ad industry entering a new phase of maturity. 

Digital ad revenues are set to surge, fuelled by innovative channels like retail media and streaming TV, along with the tried-and-true pillars of search and mobile. 

Advertisers and agencies that stay agile, by embracing data, automation and emerging formats while keeping audience trust, should find plenty of opportunities. 

The forecast £45bn figure is more than a number – it’s a sign of how central digital ads have become in the UK economy and culture.

For more information, or help with your marketing needs, get in contact with us here at Neon Atlas today.