The report said that advertising spend hit £10.6bn in the first quarter, 1.4 percentage points ahead of forecasts, with a 12.3% rise in retail media spending a major reason for the better-than-expected performance.

AA and Warc said that while they expected UK gross domestic product to remain flat at around 1.1% growth, advertising spend was forecast to rise 6.8% to £45.4bn, and 3.5% growth after inflation is taken into account.

The first quarter of 2025 also saw strong growth for online display ( 10.1%), including social media on 14.7%, as both channels benefited from budgets being brought forward in the quarter, particularly during the period of uncertainty caused by US tariffs and negotiations over trade deals.

Media channels which saw a positive early 2025 include cinema ( 19.2%), online radio ( 16.4%), search ( 12.3%), online display ( 10.1%), TV video on demand ( 5.4%) and direct mail ( 3.6%).

The AA and Warc forecasted that 2026 would see advertising grow 5.6% to reach £48bn for the year.

James McDonald, director of data, intelligence and forecasting at Warc, said: “The latest survey data highlights buoyancy in certain corners of the UK ad market, with total investment growing just ahead of forecast despite a wavering economy and a sustained period of global trade turbulence.

“Advertisers were seen to pull budgets forward and double down on agile formats within search, social, and retail media in response to the volatility sparked by new US tariffs. Brands appear to be adapting to the current environment by reallocating budgets tactically, with the outlook for the year remaining broadly positive despite persistent headwinds.”

Stephen Woodford, chief executive at the AA, said: “Further growth in the first quarter of 2025 is welcome, particularly following the launch of the UK government’s new industrial strategy which recognises advertising as a priority sector.

“With our latest Ad Pays 2025 report showing advertising supports 1.7 million jobs, we will continue to monitor advertising expenditure and work with government to highlight advertising’s contribution to the UK economy.”