Retail Media and TV+ take centre stage as UK ad spend forecast to hit £45 billion by 2026

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. 

Key findings from H1 2025 

• Retail Media powers new growth: At £1.5bn, Online Retail Media has rapidly established itself as a core channel, reflecting how brands are investing closer to the point of purchase to drive measurable outcomes. 

• TV+’s increased importance: With more than a third of video spend flowing into TV+, it is becoming a key part of digital advertising budgets, offering advertisers premium, brand-safe environments alongside digital flexibility. 

• Programmatic is as powerful as ever: 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. 

Jon Mew, CEO of IAB UK, said: “This report 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.”