Digital adspend is forecast to grow by 10% year on year in both 2025 and 2026.
That’s the latest forecast from IAB UK’s H1 Digital Adspend report, produced in partnership with management consultancy Oliver Wyman, which also found digital ad revenue in the first six months of the year totalled £18.7bn.
Search received a significant share of digital ad investment in H1 (44% or £8.3bn), even as the search market has been upset by developments in generative AI.
This was followed by digital video (23% or £4.3bn), of which more than a third comprised what the IAB refers to as “TV+” — online video content delivered to a connected TV screen via the internet.
Display advertising totalled £2.9bn (16% share), nearly four-fifths (78%) of which is now conducted programmatically.
Retail media, one of the UK’s fastest-growing media channels, totalled £1.5bn in adspend.
Other formats provided more modest revenue figures in the first half of 2025, including gaming (£620m), digital OOH (£490m), classifieds (£450m) and digital audio (£160m).
The report also found mobile advertising made up the lion’s share (71%) of all digital adspend.
As this is the first year the IAB has partnered Oliver Wyman on the report, it uses an updated methodology. As such, it is not possible to accurately compare the latest adspend report with earlier editions.
However, with 10% forecast growth this year and next, the IAB now predicts that, by 2026, digital adspend is expected to reach £45bn.
“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,” commented IAB UK CEO Jon Mew.
“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.”
Oliver Wyman partner Jeff Youssef added that the UK digital ad market has proven “remarkably resilient” despite economic uncertainty and regulatory headwinds.
This is in part due to scaled programmatic adoption as well as the growth of AI tools aimed at improving efficiency in programmatic advertising.
Despite this growth, a majority of industry leaders surveyed by the IAB (56%) cited AI as a top three challenge for the industry, with many raising concerns over a lack of transparency and an over-reliance on algorithms.
In addition, nearly one-third (31%) said measurement is a core concern amid a fragmented digital ecosystem.
Still, this hasn’t stopped investment from flowing increasingly to programmatic and AI-assisted buying.
In addition, new formats like retail media and the growth of digital video on TV sets are “unlocking fresh opportunities for growth”, according to Youssef.
He added: “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.”
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