Ad spend likely to rise in Q4, forecasts suggest
The two organisations said that projected total advertising spend for the fourth quarter of 2025 anticipated a 7.3% increase from the same period the previous year, equivalent to £814m, bringing the total spend for the whole year to £46bn, an 8.2% rise on 2024.
Video on demand (VOD) is likely to see the largest boost, according to the forecasts, rising 17.2% year-on-year to £430m in the fourth quarter.
Cinema ( 3.7%) and out of home ( 3.1%) advertising are set to see increases, with smaller rises also anticipated in direct mail ( 0.5%) and radio ( 0.5%).
However, 83% of all advertising spend during the festive season will be on online formats, according to Warc and the AA.
The forecasts expect UK advertising spend in 2026 to increase by 6.6% to £49.1bn, with TV to return to growth ( 5.8%) alongside a further rise for radio ( 2.4%).
Online formats are expected to record further growth in 2026, with search and online display up 9.2% and 6.7%, respectively.
Stephen Woodford, chief executive at the AA, said: “The Christmas advertising season is the key time for brands to inspire shoppers and win share in this critical retail period.
“Our Advertising Pays 2025 report shows every £1 spent on advertising returns £4.11 in profit for medium to large businesses and £1.89 for micro-small businesses, underscoring the importance of advertising investment especially during the festive season. Despite ongoing economic uncertainty and caution in the run up to the November budget, the advertising market is still expected to see growth next year.”
James McDonald, director of data, intelligence and forecasting at Warc, said: “Growth in video on demand services and search – particularly on retail platforms – underscores a prioritisation of digital engagement and its influence on the path to purchase.
“Looking ahead, advertising investment is forecast to rise steadily into the golden quarter, and while overall growth is expected to moderate slightly in 2026, the latest figures suggest a stable trajectory for the UK’s ad market despite a languid economy.”
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