UK ad spend reached £46.7 billion in 2025, according to the AA/WARC Expenditure Report. That is a 7.4% year-on-year increase. Social media was the fastest-growing channel. Retail media grew 17.5% and is now a £3.5 billion market in the UK alone.
The headline number is significant. UK advertising has absorbed a cost-of-living crisis, a general election and consecutive interest rate cycles without losing momentum. The market is structurally larger than it was before the pandemic and still growing.
Retail media growth rate in the UK in 2025, reaching £3.5 billion. The fastest-growing format after social.
Social's growth is being driven by short-form video, primarily YouTube Shorts, TikTok and Instagram Reels. Connected TV ad spend grew 22%, the highest rate of any broadcast-adjacent format. Linear television is declining as a share of total spend but holding absolute volume, which means audience fragmentation is the dominant challenge rather than audience disappearance.
Why it matters
The channel mix is changing faster than most mid-market brands are budgeting for. If your media plan allocates the same percentages to the same channels it did three years ago, you are almost certainly underweighted on the formats growing fastest and overweighted on formats growing slowest.
Retail media is the structural story. In the UK, retail media has crossed the threshold from experimental to mainstream. Amazon, Tesco, Boots, Sainsbury's and ASOS now operate scaled retail media networks. Brands that treated retail media as a test-and-learn budget item in 2024 are now competing against brands that treated it as a primary channel.
For Australian marketers, the UK data provides a directional read. The Coles 360 and Woolworths Cartology networks are at an earlier stage of maturity but on the same trajectory. The UK 2025 figures are a reasonable proxy for where Australia is heading in 2027 to 2028.
What to do about it
Map your current channel allocation against the growth rates. Social is growing fastest. If your social budget as a share of total spend has not grown proportionally, you are underindexed against where attention is concentrating.
For retail media, the question is whether you have the measurement infrastructure to justify increasing investment. Retail media networks offer closed-loop attribution but each network measures differently. Before scaling budget, build the reporting layer that lets you compare return on ad spend across networks on consistent terms.
The UK data does not predict the future with certainty. But it tells you where the money is going. That is usually a reliable signal about where the audience is already heading.
