Industry to prove its mettle in the face of Trump turmoil

The UK advertising market might be bracing itself for the fall out from US President Donald Trump’s new world order, but the industry is not buckling, with 6.3% growth on the cards this year and spend reaching £45.2bn, only a 0.6 percentage point downgrade from January’s forecast.

That is according to the latest Advertising Association/WARC Expenditure Report, which while recognising the fragile nature of both the domestic and global economies, predicts further growth for 2026.

This year, search (+8.2%) and online display (+9.1%) are set to continue recording gains, albeit at a slower rate than the recent years of double-digit growth, while cinema (+7.1%), out of home (+2.7%), radio (+1.9%) and TV (+0.9%) are still expected to end the year in positive territory.

The UK’s ad market is set to rise by a further 5.6% in 2026, by when it would be worth £47.8bn. TV is expected to grow to a total of £5.5bn in 2026 – a World Cup year – with VOD accounting for a third (32%) of all TV spend by the end of the forecast period. Search and online display – inclusive of retail and social media – are set to account for over 80% of the UK ad market at that time.

The report also reveals that the UK’s ad market recorded a 10.4% increase in investment to a total of £42.6bn in 2024. The latest dataset shows online formats, when combined, grew 13.2% last year with £4 in every £5 of ad budgets now spent online.

This translated to a real term rise of 7.6% once inflation was accounted for, well ahead of the UK economy generally; GDP increased by 1.1% last year, while inflation persists.

Channels that saw a boost in spend during 2024 included online display, which gained an overall increase of 15.1%. This included social media, which accounted for 53% of overall online display, and retail media, which grew 22.7% year-on-year in 2024.

Total TV spend grew by 3.8% to a total of £5.3bn last year and the category has been newly redefined to include more video services. Previously, only broadcaster VOD (BVOD) was included within the VOD component of TV, but monitoring has been expanded to include ad-supported subscription video on demand (SVOD) such as Disney+, Netflix and Prime Video, advertising-based video on demand (AVOD) and FAST (free ad supported streaming TV).

Elsewhere, growth was again recorded in the search sector last year, with spend rising 12.8% to a total of £16.9bn. Search, including retail media platforms, accounted for two in five pounds spent on advertising in the UK last year, while out of home (OOH) (+7.7%), and radio (+3.2%) saw net gains in ad billings in 2024.

Meanwhile, the direct mail market (+0.8%) returned to growth, and is still hovering around the £1bn mark (£964,300).

The latest figures also reveal the results of last year’s Christmas advertising season, which saw a 9.1% increase from the previous year. Search (+12.5%), online display (+15.4%), TV VOD (+23.2%) and cinema (+24.2%) were seen to have benefitted most from additional festive spend. Cinema’s strong final quarter was buoyed by a slate of new films including Wicked, Gladiator II (pictured) and Paddington in Peru.

Advertising Association chief executive Stephen Woodford said: “While the UK advertising industry growth is well ahead of UK growth, it’s worth noting business confidence may weaken due to geopolitical headwinds and regulatory uncertainty, which could impact on the way businesses commit to spend on advertising.

“However, it’s important to remember once again that advertising supports competition and promotes innovation, and helps to create jobs across the UK, so a healthy advertising sector is integral to a healthy economy.

“The UK advertising market is constantly dynamic, with these latest figures recording the rise of retail media and the growth of advertising opportunities from video-on-demand, reducing cost of access to TV content for people.”

WARC director of data, intelligence and forecasting James McDonald said: “Though we expect investment to grow in the coming years, we are cognisant that confidence in the UK’s advertising market remains fragile, burdened by sustained economic stagnation and recently introduced business taxes outlined in the autumn statement.

“The introduction of new trade tariffs by the Trump administration adds further complexity, particularly for sectors with high exposure to international supply chains.

“At worst, such disruption stands to erode margins, with any increase in operational costs for businesses potentially translating to higher prices at the till. The temptation to cut ad budgets in such a climate will be elevated, therefore, but WARC research clearly demonstrates that short-termism poses an inordinate risk to enduring brand equity.”