UK advertising investment rose 9.3% year on year to £11.7bn in the first quarter of 2026, as advertisers increased spending across retail media, social media, out of home, and search.
The Advertising Association and WARC Expenditure Report shows continued momentum despite pressure on consumer spending and uncertainty over the wider economy. AA/WARC now expects total UK advertising investment to rise 8.2% to £50.5bn in 2026, before growing 5.9% to £53.5bn in 2027.
Search remained the largest channel by spend, attracting £4.6bn during the quarter after 9.8% year on year growth. Digital formats recorded some of the strongest increases, including online radio at 22.1%, retail media at 17.9%, digital out of home at 17.6%, social media at 17.7%, and addressable TV at 15.5%.
Out of home as a whole rose 15.0%, while direct mail increased 7.9%, radio rose 4.2%, digital magazine brands grew 2.9%, and online classified advertising edged up 0.5%. Total TV was broadly steady, rising 0.8% in the first quarter.
Stephen Woodford, chief executive of the Advertising Association, said: “The first quarter of 2026 demonstrated the continuing resilience and rapid evolution of the UK advertising industry. With a 9.3% increase in total investment reaching £11.7 billion, it’s clear that advertisers, large and small, are finding value across our entire advertising ecosystem, relying on advertising and marketing services to help them innovate, compete, grow and create jobs.”
Suzy Young, partner relations at WARC Data, said: “The AA/WARC Expenditure Report ensures our investment benchmarks continue to accurately reflect the pace of change in advertising trade. The result is greater clarity and transparency around media investment in the UK, to the benefit of both the media industry and the public at large.”
The figures show advertising budgets continuing to favour channels that combine reach, data, and measurable conversion. Retail media has become one of the most important growth areas as supermarkets, marketplaces, and large retailers monetise customer data and digital shelf space.
Retailers are no longer only distribution partners. Many now operate media platforms built around purchase intent, loyalty data, ecommerce behaviour, and in store visibility. That gives brand owners access to audiences close to the point of sale, while retailers gain higher margin revenue beyond product sales.
Search remains structurally important because it captures demand close to the point of decision. Even as AI changes how consumers discover information, search advertising remains a major channel for performance marketing, lead generation, ecommerce, travel, financial services, and local business discovery. The £4.6bn quarterly spend shows how central it remains to acquisition strategy.
Social media growth points to continued investment in creator formats, short form video, audience targeting, and direct response campaigns. The channel also faces increasing scrutiny around brand safety, regulation, youth access, misinformation, and the reliability of measurement. Advertisers may be increasing spend, but they are also demanding clearer evidence of effectiveness.
Out of home’s strong performance reflects the return of commuter, leisure, retail, and event audiences, as well as the growth of digital screens that can be bought more flexibly. Digital out of home gives brands greater control over timing, location, and context, although it competes with online channels for performance evidence.
The growth of addressable TV shows how television buying is becoming more targeted. Broad reach campaigns still play a role, but advertisers increasingly want to connect brand building with household level relevance, frequency control, and data backed planning. That shift is changing the economics of broadcasters and streaming platforms.
The broader market picture is not simply one of confidence. Advertising spend can rise because media prices increase, because brands are investing for growth, or because competition forces companies to spend more to maintain visibility. In a slower economy, higher spend can reflect defensive pressure as much as expansion.
Brand owners are balancing several priorities. Performance channels need to generate immediate sales, but excessive reliance on short term activation can weaken long term brand equity. Data can improve targeting, but customers and regulators are pushing for more responsible use of information. AI can improve efficiency, but creative differentiation becomes harder when tools standardise production.
The AA/WARC forecast suggests advertisers are still treating marketing as a growth lever rather than a cost to cut quickly. The composition of spending shows a market becoming more fragmented, more measurable, and more demanding to manage.
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