UK advertising investment is on course to reach a record £14bn in the fourth quarter of 2026, as retail media, social platforms and addressable television continue to attract a growing share of budgets. According to the latest Advertising Association/WARC Expenditure Report, spending during the festive quarter is expected to increase by 8.2% year-on-year, adding £1.06bn compared with the same period in 2025.
The forecast follows an 11% rise in UK advertising investment in Q2, when spending reached £12.3bn. The report also upgrades its full-year outlook: total investment is now expected to reach £51.3bn in 2026, representing 9.9% growth on 2025 and an upward revision of 1.8 percentage points from the July forecast. A further 6.5% increase is projected for 2027, taking the market to £54.7bn.
Retail Media and Social Platforms Lead the Growth
Retail media recorded the strongest growth among the major advertising channels in Q2, rising 31.2% year-on-year and accounting for 8.4% of total UK advertising investment. Social media followed with a 22.2% increase, while cinema advertising grew 24.5%, supported by major releases including The Devil Wears Prada 2, The Super Mario Galaxy Movie and Toy Story 5.
Out-of-home and addressable TV advertising both recorded 12.7% growth during the quarter. Search investment increased by 9.3%, while traditional television advertising rose by 2.6%.
The momentum behind digital and targeted formats is expected to continue through the festive period. Social media investment is forecast to grow 18.5% in Q4, followed by retail media at 16.2% and addressable TV at 15.1%. Digital out-of-home advertising is projected to increase by 9.5%, while cinema is expected to grow by 8.6%.
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Addressable TV Outpaces the Wider Television Market
The latest figures point to a widening gap between traditional television advertising and more targeted TV formats. While total TV investment is forecast to rise by just 1.6% in Q4, addressable TV is expected to grow by 15.1%. The distinction is also visible in the full-year projections: total TV advertising is forecast to increase by 0.9% in 2026, compared with 14.7% growth for addressable TV.
Retail media and social media are also expected to remain the leading growth engines over the full year, with projected increases of 23% and 20.7%, respectively. The figures underline the continued shift towards advertising environments that offer more precise targeting and measurable audience engagement.
AI Emerges as an Increasingly Important Growth Driver
Commenting on the latest figures, Advertising Association CEO Stephen Woodford said the projected £1.06bn year-on-year increase in Q4 demonstrated advertising’s contribution to business growth during the festive trading period.
Suzy Young, Head of Media Data at WARC, noted that Q2 advertising performance remained strong despite geopolitical uncertainty and weaker consumer confidence. She also highlighted the growing influence of artificial intelligence on the market, as platforms improve their targeting capabilities and both AI-native businesses and established technology companies compete for customers.
Looking ahead, UK advertising investment is forecast to grow by a further 6.5% in 2027. Social media and retail media are expected to remain among the strongest-performing channels, with projected growth of 13.3% and 13%, respectively. Addressable TV is also set to maintain its momentum, with investment forecast to increase by 10.9%.
