UK Festive Ad Spend Set to Hit £12bn as VOD Surges and Search Dominates

UK marketers are primed to pour £12bn into advertising over the festive season, with brands jostling for share in the all-important Golden Quarter. 

According to the latest AA/WARC Expenditure Report, ad spend in Q4 2025 is forecast to rise 7.3% year on year – an £814m uplift on the same period in 2024. 

The report, published on 30 October, also projects total UK ad spend to increase 8.2% to £46bn across 2025, before climbing a further 6.6% to £49.1bn in 2026.

Digital takes the lead, with VOD the clear winner

While festive campaigns begin rolling out over the next fortnight, one channel is already stealing the limelight: video on demand (VOD). 

Investment in VOD is expected to jump 17.2% year on year to £430m in Q4, reflecting advertisers’ appetite for premium, targeted video environments that can convert festive intent into measurable outcomes. 

In aggregate, online formats are set to capture 83% of all Golden Quarter spend, with search (including retail media) accounting for 40% alone – evidence of how close to the point of purchase digital touchpoints now sit.

A mixed picture for television and the high street

It’s not all cheer for broadcast. The overall TV market is forecast to contract by 5.2% in Q4, a symptom of a languid economy and pockets of advertiser caution. Yet other high-street-adjacent channels are expected to benefit from seasonal footfall. 

Cinema spend is set to rise 3.7%, while out of home (OOH) improves 3.1%, bolstered by festive retail traffic and late-year leisure outings. More modest gains are anticipated in direct mail and radio (both +0.5%), as brands broaden their channel mix to reinforce reach and frequency in the run-up to Christmas.

Where spend is softening

Not all sectors are in growth. Online classified is projected to dip 1.6%, with national news brands down 2.9% and magazine brands falling 4.2%. 

These shifts underline how advertisers continue to rebalance budgets toward performance-oriented digital formats and high-impact video, while legacy display environments feel the pressure of evolving measurement and planning priorities.

Executive sentiment: inspire shoppers, hold your nerve

The Advertising Association’s chief executive frames the festive window as the critical moment to inspire shoppers and win share – a message that resonates despite ongoing economic uncertainty and the caution that typically precedes the November Budget. 

The view from the trade body is pragmatic but positive: growth is expected to continue into next year, even as marketers keep a close eye on macro signals.

Q2 2025 scoreboard: momentum behind VOD, cinema and online audio

The forecast also reflects hard numbers from Q2 2025, when UK ad spend rose 9.1% to £11.3bn. VOD led the pack with +23.2% growth, as brands doubled down on addressable video to reach fragmented audiences. 

Cinema enjoyed a +19.7% lift, buoyed by summer blockbusters such as A Minecraft Movie and Lilo & Stitch, which helped pull audiences back to big screens and, with them, marketers’ budgets. 

Online radio posted robust +11.2% growth, while online magazine brands (+4.4%) and direct mail (+4.8%) also advanced – proof that well-targeted, context-rich placements continue to earn their keep.

Linear TV and regional news under pressure

By contrast, linear TV contracted 4.1% in Q2, OOH slipped 1.2%, and regional news brands fell 7.8% – a reminder that while total market demand is healthy, the mix is shifting decisively toward digital activation and measurable outcomes.

The half-year tally: AI, retail media and the performance pivot

Across the first half of 2025, UK ad spend climbed 8.9% to £22bn. 

WARC estimates that search and online display (including retail and social) captured roughly 81% of that total – around £17.9bn – a dominance attributed to ongoing investment in Artificial Intelligence for efficiency, targeting and performance optimisation across platforms. 

For marketers, the implication is clear: the performance engine is increasingly powered by machine-learning feedback loops, retail-media signals and creative that can flex in real time.

Outlook: steady ascent, slight moderation

Looking to H2 2025, AA/WARC expects some moderation as the market normalises, with full-year spend still rising 8.2%. 

Into 2026, growth is projected at +6.6% to £49.1bn. WARC’s director of data, intelligence and forecasting highlights the outperformance of VOD and search  – particularly on retail platforms – as evidence that brands are prioritising digital engagement where it most directly shapes the path to purchase. 

Even with flat consumer confidence in recent years, the trajectory for the United Kingdom ad market is described as stable.

What it means for marketers

For brand leaders planning the last stretch of 2025, the story is one of disciplined expansion: invest where consumers are most engaged (VOD), where intent is hottest (search and retail media), and where real-world presence adds incremental reach (cinema and OOH). 

Balance that with a watchful eye on costs, creative effectiveness and AI-driven optimisation, and the festive season can still deliver outsized returns – even in a cautious economy.

Conclusion

The UK ad market heads into the Golden Quarter in growth mode, with £12bn of festive spend poised to activate across a channel mix that increasingly favours digital, VOD and search. 

Q2’s strong showing and a solid first half underline the momentum behind AI-enabled performance and retail media, while traditional channels face selective pressure. 

With 2025 on track for 8.2% growth and 2026 set to advance to £49.1bn, the outlook is steady: brands that align investment to where attention and intent converge will be best placed to turn seasonal sparkle into sustained share.