UK digital ad spend is forecast to reach £45 billion by 2026, growing by around 10% year-on-year in both 2025 and 2026, according to the IAB UK HY 2025 Digital Adspend Report. The findings highlight the resilience and maturity of the UK’s digital ad industry, with Retail Media and TV+ emerging as key forces shaping its future.
In the first half of 2025, UK digital ad spend totalled £18.7bn. Search led investment at £8.3bn (44% share), while video spend reached £4.3bn (23% share), with TV+ making up more than a third of this. Display advertising stood at £2.9 billion, and Online Retail Media hit £1.5 billion, cementing its position as one of the fastest-growing channels. Other formats – Gaming (£620m), Digital Out-of-Home (£490m), Classifieds (£450m) and Digital Audio (£160m) – contributed a combined £3.2bn. Mobile accounted for 71% of all spend (£13.3bn), confirming its dominance as the primary platform for digital advertising.
Programmatic trading has been broken out, with automated buying now making up a landmark 78% of digital display spend. This milestone underscores how central programmatic has become to how the industry operates.
Beyond these growth areas, the report highlights the role of AI in transforming the market. Generative tools are enabling SMEs to create ad content quickly, dynamic creative optimisation is boosting personalisation in retail media and audio, and self-serve AI platforms are making targeting more efficient and privacy-compliant. Yet the industry is also cautious: 56% of industry leaders cited AI and automation as a top three challenge, with concerns over transparency, homogenised creative and over-reliance on algorithms.
Measurement is another topic of concern, with 31% of respondents calling it a top challenge amid ongoing fragmentation and a lack of standardisation. At the same time, regulatory change – from less healthy food (LHF) restrictions to evolving privacy rules – and economic uncertainty are shaping planning cycles, pushing advertisers to diversify spend and seek greater resilience.
Industry reaction
Commenting on the report, Jon Mew, CEO of IAB UK, said: “This shows not just where the market is today, but where it’s heading. With programmatic trading now the norm and digital spend set to hit £45bn by 2026, the UK ad industry is entering a new phase of maturity. From AI to emerging formats like Retail Media and Audio, innovation is driving growth and ensuring digital continues to deliver for advertisers and audiences alike.”
Jeff Youssef, partner at Oliver Wyman, added: “The UK digital advertising market has proven remarkably resilient in the face of economic uncertainty and regulatory headwinds. Programmatic adoption at scale and the growing role of AI are reshaping how campaigns are planned and delivered, while new formats such as Retail Media and TV+ are unlocking fresh opportunities for growth. The challenge now lies in balancing innovation with trust, transparency and effective measurement to ensure that the next phase of growth is both sustainable and inclusive.”
Emma Cranston, Senior Director of Advertising at Ozone, commented: “The IAB’s forecast of double-digit growth through to 2026 underlines both the strength and complexity of today’s digital ecosystem. While the sheer scale of investment is positive, what really matters is how and where that spend lands. Advertisers are increasingly navigating a fragmented marketplace – one where premium, transparent environments with real attentive audiences will undeniably deliver more meaningful impact than impressions served across low-quality or MFA domains.
“With digital’s continued growth, the conversation surely now has to shift from volume to value: prioritising audience-first environments, those places where people come to be informed, inspired and entertained, and ensuring brands know exactly where their audiences are being served their messages. As we approach 2026, it’s never been more important that brands have easy and transparent access to their audiences at scale in the places where they are spending their time.”
Phil Duffield, VP UK of The Trade Desk, said: “It’s no surprise that premium channels like connected TV are powering digital ad growth. Advertisers know that showing up in these environments helps protect and grow their brand – our latest research found that 85 percent of consumers trust brands more when they appear on premium environments, and these are 1.3x more likely to lift purchase intent.
“By clearly demonstrating the ROI and value of advertising in these environments, premium channels will only galvanise further investment from brands – creating a cycle that will fuel sustained growth in budgets throughout 2026.”
The Digital Ad Spend report is conducted by IAB UK and Oliver Wyman using a robust and multi-faceted approach. Data is collected from submissions from members and reported numbers in the public domain. This is enriched through statistical modelling to fill any gaps and guarantee full market coverage. In addition to the quantitative data, a qualitative overlay of interviews with key industry players was conducted across platforms, retail media, TV+, audio, and publishing sectors.
