UK ad spend rose to £11.7 billion in Q1 2026, according to the latest Expenditure Report from the Advertising Association and WARC, prompting an upward revision in the ad market forecast for 2026 and 2027.
Based on a survey of media owners and the industry bodies that represent them, the research found that advertisers’ investment in media space increased by 9.3 percent YoY during the first quarter.
The Advertising Association and WARC said the report “highlights a diverse media landscape where advertisers are actively investing across a variety of established and emerging formats.” This resulted in “broad-based growth” for the UK ad market, according to the research, signalling that businesses are looking to “make the most of the full breadth of the UK’s advertising ecosystem.”
TV’s awkward phase
That said, the breakdown of media investment by category suggests that growth was not spread across the board. Cinema ad spend declined by 17.6 percent YoY, while published media (which includes magazine, national and regional news brands, along with their online counterparts) fell by 5.9 percent YoY. The ‘other online display’ category (which excludes display revenues from published media, radio, retail media, social media and TV) also dropped by 10.7 percent.
Meanwhile TV remains in the challenging situation where high growth in digital advertising is being offset by ongoing declines in linear TV sales, creating a broadly flat TV market. In Q1 2026, ad spend on addressable TV increased by 15.5 percent, bringing total TV spend to 0.8 percent growth.
But the report found double-digit growth in retail media (17.9 percent), social media (17.7 percent) and out-of-home (15 percent), while search (9.8 percent), direct mail (7.9 percent) and radio (4.2 percent) also saw growth in Q1. Search continued to account for the largest share of the market, according to the research, attracting £4.6 billion in ad investment during the quarter.
Recovery ahead for cinema and TV
Looking ahead, these trends are expected to continue through 2026 and into 2027. According to the forecast, search, social media and retail media are expected to see further growth over the next two years, while published media and other online display are headed for ongoing declines.
However, cinema is projected to grow on an annual basis, presumably due to major theatrical releases in the second half of the year. And despite its flat performance in Q1, TV spend is forecast to grow by 3.7 percent this year (likely lifted by the FIFA World Cup) and 3 percent in 2027.
Overall, the Advertising Association and WARC predict total ad investment to climb 8.2 percent to reach £50.5 billion in 2026, and then 5.9 percent to £53.5 billion in 2027. These both represent upward revisions from April’s forecast of £49.8 billion and £52.6 billion.
“The first quarter of 2026 demonstrated the continuing resilience and rapid evolution of the UK advertising industry,” said Stephen Woodford, Chief Executive, Advertising Association. “With a 9.3 percent increase in total investment reaching £11.7 billion, it’s clear that advertisers, large and small, are finding value across our entire advertising ecosystem, relying on advertising and marketing services to help them innovate, compete, grow and create jobs.”
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