It’s been a rocky few years for TV ad revenues in the UK: a sharp drop during the pandemic, an extremely strong bounce back the next year, but then two years of falling revenues in 2022 and 2023, according to figures from the Advertising Association and WARC’s quarterly Expenditure Report. Now, however, UK TV is set for a little positive consistency, according to the latest figures.
Today’s Expenditure Report found that total UK TV ad revenues were up 3.8 percent year-on-year, reaching £5.3 billion. And the AA and WARC expect at least two more years of growth, forecasting a 0.9 percent rise this year, followed by 4.0 percent growth in 2026.
Unsurprisingly, it’s streaming which is providing this growth. The Expenditure Report has for the first time extended its measurement of video on-demand (VOD) ad revenues to include services outside of the UK broadcaster-owned apps, including Netflix, Disney+, and Prime Video, as well as free ad-supported streaming TV (FAST) channels. Collectively, VOD ad revenues were up 25.7 percent last year, reaching £1.3 billion, and now accounting for just over a quarter of all TV ad revenues. The figures provided by the report suggest a fall in linear TV ad revenues of around £82 million year-on-year.
The Expenditure Report forecasts VOD growth of 17.1 percent this year, and 13.5 percent in 2026. While the report doesn’t break out the data for linear TV specifically, the figures suggest a 4.6 percent drop in linear TV ad revenues this year, followed by 0.05 percent growth next year (when the men’s World Cup is expected to give revenues a boost).
The period of sustained growth is certainly a positive for the UK TV industry. This growth should be put in context though: total revenues aren’t expected to pass 2021 levels until next year (and that’s including the boost provided by the measurement of revenues from non-PSB streaming services).
Elevated temptation to cut ad budgets
Looking at the wider UK advertising market, the Expenditure Report says total ad spend was up 10.4 percent in nominal terms in 2024, equal to a real rise of 7.6 percent when accounting for inflation. This puts ad spend growth significantly ahead of total GDP growth, which was up 1.1 percent.
Digital channels continued to drive total growth, with the AA and WARC finding that £4 in every £5 of ad budgets are now spent online. Online display (which includes VOD revenues and digital ad revenues for news brands, magazine brands, and radio), was up 15.1 percent last year, with social media accounting for over half of total spend. Retail media also grew rapidly, up 22.7 percent year-on-year in 2024.
Forecasts for this year and next year have been revised downward slightly since the previous Expenditure Report, reflecting economic uncertainty relating to US tariffs. But even with this turbulence, total ad expenditure is projected to grow 6.3 percent this year (compared with a previous forecast of 6.9 percent) and 5.6 percent next year.
“Though we expect investment to grow in the coming years, we are cognisant that confidence in the UK’s advertising market remains fragile, burdened by sustained economic stagnation and recently introduced business taxes outlined in the Autumn statement,” said James McDonald, director of data, intelligence, and forecasting at WARC. “The introduction of new trade tariffs by the Trump administration adds further complexity, particularly for sectors with high exposure to international supply chains.”
“At worst, such disruption stands to erode margins, with any increase in operational costs for businesses potentially translating to higher prices at the till,” McDonald added. “The temptation to cut ad budgets in such a climate will be elevated, therefore, but WARC research clearly demonstrates that short-termism poses an inordinate risk to enduring brand equity.”
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