Despite economic uncertainty both locally and globally, UK advertising spend continues to grow, driven by widespread adoption of AI tools and mounting pressure on marketing budgets to deliver short-term wins.
Between July and September 2024, the UK advertising market grew 9.7% to £10.6bn, marking the first time ad spend has exceeded the £10bn barrier in Q3, according to the Advertising Association and WARC’s quarterly expenditure report. For the first nine months of 2024, total UK ad spend rose 12.2% to £30.1bn.
Unsurprisingly, most of the growth was in online formats, with online display up 15.2% (inclusive of social media at 17.8%) and search up 12.6%, while legacy media posted mixed results.
“More spend funnelled to search and online display is not a new trend and is more likely a symptom of marketing budgets under pressure and the ongoing tendency towards short-termism amongst advertisers,” explains strategy director at media agency The7stars, Rosalie Shakir, warning that reliance on performance metrics to guide budget decisions can be short-sighted.Seven trends that will shape media in 2025
Advancements in AI and automation may be accelerating this trend by making the immediate returns on performance-driven channels more visible, prompting brands to invest more heavily. Meanwhile, economic uncertainty continues to make businesses cautious with their spending.
WARC’s director of data, intelligence and forecasting, James McDonald, highlights potential global economic ripple effects from Donald Trump’s return to the US presidency.
“In the UK, advertising businesses will look to the UK government’s growth strategy and how it will affect the industry,” he says. “Deterioration in overall business confidence could lead some marketers to depress spend in the short term.”
In difficult times, increasing spend to performance channels can feel like the ‘safe’ option.
Rosalie Shakir, The7stars
Out-of-home (OOH) and radio continued to grow in Q3, rising 4.4% and 3.8%, respectively. Meanwhile, six media formats saw declines in ad spend.
Within traditional print media, national news brands registered a decline of -5.7%, regional titles fell -1.6% and magazines dropped -16.4%. Online classified fell –13.5% and cinema experienced a big –26.1% drop, following a return to growth last quarter.
“In difficult times, increasing spend to performance channels can feel like the ‘safe’ option, but often leads to an over-dependence longer term if brand building has been neglected. That demand becomes increasingly costly to harvest as attention shifts to other, stronger competitor brands,” notes Shakir.
After TV’s strongest quarter in two years in Q2 – driven by the 2024 Men’s Euros – ad spend dipped by -2.6% this quarter. However, BVOD (8.7%) and online radio (10%) both registered an increase, fuelled by live sports coverage, including the Olympics, Paralympics, and the later stages of the Euros.
Despite consistent growth in more performance-driven marketing channels, Group M’s global president of business intelligence, Kate Scott-Dawkins says clients are still wanting to “push down” on brand spend.
“There’s ample understanding amongst large advertisers, in particular, that brand is still very important, but it doesn’t tend to be the first port of call for more small, medium-sized businesses on many of those self-service platforms,” she notes.UK marketing budgets return to growth despite main media spend stalling
Meanwhile, direct mail returned to growth (up 12.9%) for the first time in over two years. Scott-Dawkins notes this may be symptomatic of marketers looking for opportunities beyond where they’ve previously been spending.
“It tends to be a very effective form of marketing,” she says. “When people are less used to seeing something come across in the mail, like younger consumers who weren’t used to direct mail in the past, standing out in that way can be very useful for a brand.”
Nielsen data reveals that only two major sectors increased display spend during Q3 2024. The financial sector rose 6.9%, largely due to a very weak comparable period in Q3 2023, but also fuelled by disruptor brands using marketing as a means of growth.
“For example, Monzo, I’m seeing that a lot at the moment on TV, which wouldn’t have happened a few years ago because they’ve just scaled to a point where now that’s the obvious way for them to grow further and reach more people,” says Whittington.
The consumables sector, including food and drink, cosmetics, and household FMCG, grew 4%, with household FMCG up 21% and food rising 7.6%.
“CPG companies are really viewing advertising as a growth driver rather than a cost centre,” notes Scott-Dawkins.
“They’re not able to rely on pricing growth, as they have been throughout high inflation, so they’re having to transition and do volume growth, and they’re looking at using marketing and commercialisation in that space to help drive that growth.”
Past and future
AA and WARC estimate that the UK advertising market grew 11.2% in 2024, an upgrade of 0.6 percentage points from October’s forecast, with full-year spend expected to hit £40.7bn.
When final figures are released in April, the strongest-performing channels are expected to include online display (18.9%), search (12.7%), BVOD (12.4%) and OOH (10.3%).
In 2025, UK ad spend is projected to climb 6.9% to £43.5bn, marking a 0.4 percentage point increase from October’s forecast.
Key growth areas mirror 2024, with BVOD (12.9%) and online display (9.4%) —including social media — leading the charge. While cinema (4.7%), online classified (2.5%), and online magazine brands (1.3%) are also expected to return to growth.
Despite broader economic uncertainty, UK ad spend is expected to outperform the UK economy, with real-term growth forecasts of 8.5% in 2024 and 4.5% in 2025.
