UK Retail Media Ad Spend up 32% in the first half of 2026

Right, this one's a big shift for UK advertising, and it shows where a lot of marketing budgets are heading. On 7 October 2026, the IAB UK's Digital Adspend Study revealed that online retail media ad spend in the UK surged by a massive 32% in the first half of the year. That's £2 billion spent in just six months, making it the fastest-growing category in the entire digital advertising market.

This isn't just about big retailers selling more stuff; it’s a clear signal that retail media is evolving. It's moving beyond a simple sales tool to become a strategic channel for reaching audiences and building brands, right across the customer journey.

For UK marketers and business owners, this means it’s time to look at retail media differently. It’s no longer just a niche play for those selling directly on Amazon or Tesco. This is about understanding a rapidly expanding, crucial channel that offers both direct sales and broader brand awareness.

What's actually happened with UK ad spend

The latest IAB UK Digital Adspend Study H1 2026, produced with mediasense, delivered some striking numbers. UK retail media ad spend grew by 32% year-on-year in the first half of 2026, hitting £2 billion. This made it the fastest-growing category in the whole UK digital advertising market during that period, as reported by InternetRetailing.

To put that into perspective, the overall UK digital advertising market grew by 13% to £21.2 billion in H1 2026. While other categories like video advertising (up 18% to £5.1 billion), search (up 10% to £9.1 billion), and display advertising (up 9% to £3.1 billion) also saw growth, retail media’s leap was far more significant.

Its £2 billion market size now comfortably surpasses other areas such as gaming (£0.7 billion), digital out-of-home (£0.5 billion), and classified advertising (£0.5 billion). It’s a genuine powerhouse in its own right.

Why retail media is growing so fast

The core reason for this explosion in retail media isn't just more people shopping online (though that helps). It's a fundamental shift in how brands and advertisers view the channel. It used to be seen almost exclusively as a bottom-of-the-funnel tool, primarily for converting shoppers who were already ready to buy.

But that's changed. Rob Ishag, UK country manager at TripleLift, put it plainly:

"Retail media's 32% growth confirms that commerce data is no longer just a bottom-funnel targeting tool; it's becoming a strategic layer across the whole customer journey."

This means brands are using retail media data and platforms to reach shoppers earlier in their journey, even before they've decided what to buy. Ishag also noted that the real opportunity now lies offsite, where this commerce intelligence can be combined with context and creative to engage shoppers while their intent is still forming, rather than just capturing demand at the point of purchase.

This broader approach is also echoed in the growth of other channels. Connected TV (CTV) advertising, for example, reached £1.7 billion in H1 2026, a 22% year-on-year increase. These channels are all about reaching audiences with highly relevant content and ads, often earlier in the purchase cycle.

The IAB UK study also highlighted that economic uncertainty was a top-three challenge for 70% of respondents, followed by AI and automation (37%) and measurement (30%). In a challenging economic climate, advertisers are naturally gravitating towards channels that offer measurable results and access to high-intent audiences.

Mediasense forecasts that digital advertising investment will rise 12% across 2026 to £45.2 billion, before moderating to 10.5% growth in 2027. Retail media is clearly a key driver of that continued investment.

What this means for your brand

For UK businesses, this surge in retail media spend means a few things. Firstly, if you're not already exploring it, you're missing out on a significant and growing audience. It’s no longer just for the retail giants; smaller brands are finding opportunities too.

Secondly, it's time to rethink how you use these platforms. Don't just view them as places to run product ads to people almost ready to check out. Consider how you can use retail media for brand awareness, reaching potential customers at the discovery stage, or even engaging them off the retailer's direct platform.

This is about integrating retail media into your wider marketing strategy, rather than treating it as a siloed, conversion-only channel. The data available through these platforms can offer rich insights into consumer behaviour, which can inform your marketing efforts elsewhere.

This is a fundamental shift in how brands are connecting with customers, and it's only set to become more central to digital strategy. If you need a hand figuring out where to start, give us a shout.