From January to March, UK advertising spend climbed 8% to a total of £10.6bn, driven by short-term solutions, according to new figures from AA and WARC.
As advertisers sought more short-term solutions during the US administration’s trade negotiations, budgets for search and online display increased in Q1.
UK advertising spend climbed 8% to a total of £10.6bn in the first three months of 2025, according to the latest AA and WARC expenditure report – 1.4 percentage points ahead of the April forecast. Growth was driven primarily by an improved outcome for search, including retail media (12.3%) and gains for online display (10.1%), including social media (14.7%).
Despite a “wavering economy” and “global trade turbulence”, WARC’s director of data, intelligence and forecasting, James McDonald, noted signs of “buoyancy” across parts of the UK ad market.Rebound in marketing budgets driven by short-term media
“Advertisers were seen to pull budgets forward and double down on agile formats within search, social and retail media in response to the volatility sparked by new US tariffs,” he says.
“Brands appear to be adapting to the current environment by reallocating budgets tactically, with the outlook for the year remaining broadly positive despite persistent headwinds.”
Cinema experienced a 19.2% growth supported by big budget releases, including Bridget Jones: Mad About The Boy and Captain America: Brave New World. Similarly, online radio (16.4%) also continued its streak of double-digit growth, benefiting from tech-fuelled shifts in audio habits.
Total TV fell –2.1%, yet video-on-demand (VOD) increased 5.4%. Last quarter, AA and WARC expanded the VOD component of TV to include broadcaster video on demand (BVOD), ad-supported subscription video on demand (SVOD) such as Disney+, Netflix and Prime Video, advertising-based video on demand (AVOD) and free ad-supported streaming TV (FAST).
Direct mail (3.6%) and OOH (1%) registered growth, while online classified (-7.6%), national newsbrands (-8.2%), magazine brands (-11.1%) and regional newsbrands (-6.8%) all declined.
The findings echo Q1’s IPA Bellwether report, which showed brands adopting a cautious “wait and see” approach amid rising geopolitical tension.UK ad spend surpasses £40bn for first time
UK ad spend is set to grow 6.8% this year to £45.4bn, a 0.4 percentage point upgrade from April and a new record for the market.
Although UK GDP is forecast to remain flat at 1.1% in 2025, ad spend is still expected to grow 3.5% in real terms, after inflation.
Channels projected to see gains include TV VOD (10.1%), search (9.4%), online display (9.2%), cinema (9.0%), out-of-home (3.1%) and radio (1.2%). Looking ahead, AA/WARC’s forecast remains unchanged for 2026, with the advertising market expected to grow 5.6% to reach £48.0bn.
