The golden quarter looks set to be the most glittering yet for the UK advertising industry, with adspend forecast to reach £14.0bn in Q4 2026, up 8.2% year-on-year, and total investment for 2026 now set to top £51.3bn (+9.9%), growing to £54.7bn (+6.5%) in the year ahead.
That is according to the latest upbeat Advertising Association/WARC Expenditure Report, in sharp contrast to UK GDP which is due to rise just 0.1% in Q4 and 1.2% FY, proving what a powerhouse the advertising industry is in supporting the economy.
The report also confirms strong performance in the second quarter of 2026, with advertising investment rising by 11.0% year-on-year to £12.3bn.
The rise of retail media and AI appear to be the main drivers behind this surge. Retail media – a channel that was virtually untapped until a few years ago – commanded an 8.4% share of total advertising investment, growing 31.2% year-on-year, while the maturity of the UK’s digital ad market has been the perfect platform for AI to thrive.
Q2 2026 also saw cinema posting strong growth of 24.5% year-on-year, due to major releases including The Devil Wears Prada 2, The Super Mario Galaxy Movie, and Toy Story 5.
Double-digit growth was recorded across several other channels, including social media (22.2%), out of home (12.7%) and addressable TV (12.7%), with search (9.3%), online classified (4.4%), digital radio (3.2%) and TV (2.6%) also rising.
Interestingly, direct mail, a medium that many have claimed is withering and dying on the vine, increased spend by 4.5% in Q2 and is expected to rise by 4.1% year on year, despite ongoing issues at Royal Mail.
Meanwhile, looking ahead, advertising investment across the festive period is set to reach £14.0bn, a £1.06bn boost on last year and up by 8.2%.
Social media is projected to rise 18.5% year-on-year, alongside retail media (16.2%) and addressable TV (15.1%). Cinema (8.6%) and search (7.8%) are both set to continue to see growth throughout the festive period.
Increased high-street footfall during the golden quarter is set to benefit out of home (OOH), forecast to grow 7.5%, with digital OOH up 9.5%. Further gains are anticipated for digital radio (4.7%), direct mail (1.8%), total TV (1.6%) and online classified (1.6%).
Even so, adspend growth is expected to moderate in the second half of 2026 and further into 2027, rising by 9.9% overall this year and 6.5% next year.
Full-year UK advertising investment for 2026 is forecast to reach £51.3bn, an upward revision of 1.8 percentage points on the July 2026 forecast. Growth will be led by retail media (23.0%), social media (20.7%) and addressable TV (14.7%), with further gains expected across out of home (10.8%), search (9.1%), digital radio (9.1%), cinema (6.9%), direct mail (4.1%), and total TV (0.9%).
Looking ahead to 2027, total advertising investment is projected to reach £54.7bn. Key growth drivers include social media (13.3%), retail media (13.0%) and addressable TV (10.9%), alongside continued gains in search (6.6%), digital radio (4.2%), digital OOH (4.3%), and TV (1.7%).
Advertising Association chief executive Stephen Woodford said: “As we approach the festive season, UK advertising continues to demonstrate strong growth momentum, with Q4 investment forecast to rise 8.2% year-on-year to £14.0bn. This represents a £1.06bn boost compared to the same period in 2025, underlining the vital role advertising plays across all channels and media formats in supporting business growth during the golden quarter and beyond.”
WARC head of media data Suzy Young added: “Q2 2026 ad investment remained strong despite geopolitical headwinds and weak consumer confidence linked to the Middle East conflict.
“Growth was boosted by the Fifa World Cup, but increasingly reflects AI investment, as platforms enhance targeting while both new AI-native companies and established tech firms compete for customers – a dynamic that improves efficiency while generating new demand, helping offset weaker sentiment. This AI-driven boost is especially pronounced in the UK, given the maturity of its digital advertising market.”
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