UK Digital Adspend 2025: The £40.5bn Market Breakdown for Advertisers

The UK digital advertising market just crossed a line it has been building towards for years. According to IAB UK's Digital Adspend 2025 study, produced in partnership with Oliver Wyman, total digital ad investment hit £40.5bn in 2025, up 10% year on year. To put that in context, the report notes UK GDP grew just 1.4% over the same period, so advertisers are pouring money into digital roughly seven times faster than the wider economy is growing.

The market split £18.7bn in the first half and £21.8bn in the second, a familiar shape weighted towards the golden quarter. As a paid media team that lives in these channels every day, we wanted to pull out the numbers that actually change how you should think about your 2026 plan, rather than just admire the headline.

Search still rules, but it is growing the slowest

Search remains the single biggest slice of the pie. IAB UK puts search investment at £17.9bn, a 44% share of all digital adspend, growing 6% year on year. That is healthy, but it is also the slowest-growing major format on the list, which tells you the centre of gravity is shifting.

Our take: search is not in trouble, it is maturing. When the biggest channel grows below the market average, the growth is coming from elsewhere, and budgets follow growth. The smart move is not to cut search, it is to make every pound work harder through tighter feeds, sharper intent matching and better measurement, then put the incremental budget into the formats climbing fastest. If you want a steer on where search is heading next, our breakdown of the new AI search ad formats from Google Marketing Live is a good companion read.

Social is the growth engine, and it is now a video business

Social media investment rose 21% to £11.5bn, a 28% share of the market. The detail underneath that number is the real story: video now makes up 59% of all social investment. Social is no longer a feed of static posts with a budget behind them, it is a video-first environment where the creative has to earn attention in the first second.

Our take: if more than half of social spend is video, your production approach cannot be an afterthought. The brands winning here are the ones treating short-form video as the core asset, not a repurposed TV cutdown. That is exactly the shift we explore in our take on mid-funnel social and where attention is actually converting. Volume, speed and a willingness to test creative angles beat one polished hero film almost every time.

Video crosses into the mainstream at £9.3bn

Total video adspend grew 20% to £9.3bn, now 23% of the entire digital market. Nearly a quarter of every digital pound is going into video. And within that, the report flags that TV+ accounts for 34% of all video investment, a sign that connected TV and broadcaster on-demand are pulling serious budget out of the linear world and into addressable, measurable buys.

Our take: video has graduated from a brand-awareness luxury to a core performance channel. With TV+ taking a third of video spend, the line between "TV money" and "digital money" is effectively gone. If you are still treating connected TV as a separate, untouchable brand budget, you are leaving targeting and measurement on the table that your competitors are already using.

The fast movers: retail media, gaming and DOOH

Three smaller categories are growing well ahead of GDP and worth watching:

• Retail media: £3.8bn, up 18%. The retailers own the purchase data and the checkout, and advertisers are paying for that proximity to the sale.
• Gaming: £1.3bn, up 11%. A maturing, brand-safe inventory pool that is no longer niche.
• Digital out of home: £1.1bn, up 11%. Programmatic DOOH keeps blurring the line between physical and digital media.

Our take: retail media in particular is the one to brief now if you sell physical products. The growth rate, plus first-party purchase data the open web simply cannot match, makes it one of the most defensible places to spend in a privacy-first world.

What the industry expects next

IAB UK's forecast has the market growing another 10.3% in 2026 to reach £44.7bn, and £49.1bn by 2027. Sentiment backs that up: 57% of respondents expect their digital budgets to increase in 2026, with video, retail media and DOOH tipped for the strongest gains. And looking further out, 48% named AI and automation as the defining force for the sector over the next decade.

Our take: the through-line across every fast-growing format is the same, better data and better automation. AI is already deciding where most of this £40.5bn lands through Smart Bidding, Advantage+ and Performance Max, and the IAB's own respondents expect that to deepen. The job for advertisers is to feed those systems clean data and clear goals, then measure ruthlessly. That is exactly the work we do through our measurement and analytics practice, because automation is only as good as the signals you give it.

What this means for your 2026 plan

Strip out the noise and the IAB UK data points to four moves. Keep search efficient rather than cutting it, because it is still 44% of the market. Treat social as a video channel and resource the creative accordingly. Bring connected TV into your performance thinking now that TV+ is a third of video spend. And brief retail media early if you sell products, because the growth and the data both sit there.

If you want help turning these numbers into a media plan that actually moves your revenue, get in touch. We will build it on the same channels the rest of the market is racing into, just with the measurement to prove it is working.

All figures in this article are from IAB UK's Digital Adspend 2025 report, produced in partnership with Oliver Wyman. Read the full release on the IAB UK website.