UK Adspend Climbs 8% in Q1 2025 as Marketers Chase Performance and Flexibility

The UK advertising market has kicked off 2025 with an unexpected show of strength. According to the latest AA/WARC Expenditure Report, adspend rose 8% in Q1 to £10.6bn, 1.4 percentage points ahead of projections, driven by surging investment in search, retail media, and online display. Cinema and digital audio also saw strong momentum, buoyed by content-driven audience engagement and changing media habits.

Full-year adspend is now forecast to grow 6.8% to £45.4bn, with a further 5.6% increase predicted for 2026.

Yet behind the topline optimism lie shifting priorities: from front-loaded budgets and performance-first thinking to more agile, responsive planning cycles.

LBB speaks to agency and media leaders about what’s fuelling the uptick, how brands are navigating uncertainty, and why the smartest players are finding ways to pair short-term results with long-term brand health.

Sam Holland, client partnerships director at UniLED Software

The AA/WARC Q1 2025 figures show another quarter of growth, albeit small. For the OOH industry a mere 1% uplift is further proof that advertisers remain cautiously optimistic when it comes to ad spend investment, focusing on short-term, tactical activations. This is something we’ve seen evidenced – and has been discussed widely – from other industry-wide ad spend reports.

While any growth in adspend is welcomed, it’s slightly frustrating to see circumspection when it comes to media planning and channel choice. The simple fact is that to be effective and have impact, media investment needs to align with media consumption – which is why smart advertisers are going beyond search and online, ensuring DOOH activations are also in the media mix. As a trusted, passive medium DOOH is helping brands to truly connect with their audience and capture attention by delivering ROAS without interrupting or disrupting the consumption of editorial content. And as an aside, it will help to support the wider industry as a whole to thrive, not stagnate.

Tom Stone, co-founder of re:act

There’s a growing sense that the UK is becoming a more favourable market for marketing investment, partly as a result of trade tensions elsewhere. We’re seeing global brands redirect spend here, especially with economic uncertainty dampening growth in other regions. That influx, combined with marketers continuing to front-load budgets to secure performance early, is helping lift the overall numbers. It’s no surprise to see digital channels like search and retail media driving the gains.

These formats offer flexibility and speed, which feels crucial in a climate where plans are shifting week to week. Most marketers I speak to are building more responsive strategies, ditching the rigid calendar approach in favour of more fluid decision-making. While performance will remain a focus, the opportunity now is to balance it with longer-term brand building, especially as consumer confidence slowly recovers. The next wave of growth may well come from those who do both.

Brett Aumuller, managing director at Sky Media

The AA/WARC report underlines a clear trend: VOD continues to grow with a forecasted 10.1% uplift this year – and it’s easy to see why. As advertisers face ongoing economic uncertainty and rising pressure to prove effectiveness, we’re seeing more brands turn to VOD for its ability to combine premium content environments with digital-style targeting and measurement.

This isn’t about replacing linear TV but enhancing what television can do. VOD helps advertisers reach more defined audiences, control frequency, and get closer to outcomes with greater precision.

The growth we’re seeing reflects how VOD is becoming a core part of the media mix for brands seeking both impact and accountability. Ultimately, it shows that advertisers are prioritising trusted, brand-safe platforms that deliver measurable results, and modern TV is meeting that brief.

Katy Wright, CEO at FCB London

While I’m pleased to see that the joy of cinema lives on and storytelling isn’t dead, the report raises a familiar tension: performance marketing versus long-term brand growth.
Inspired by the women’s Euros, this is a tale of two halves. Rather than chasing the quick win, sometimes we need extra time. And if we’ve learnt anything from the last few years, it’s that there is always a place, irrespective of the climate, for big, bold ideas. The brands that do this are the brands that survive.

In that sense, our creative approach should always balance immediate performance with strategic brand development to build lasting connections.

I’m not about to get on my soap box (mostly because it’s a recyclable bag and it wouldn’t support my body weight), but it’s clear that when everything else – from budgets to consumer attention – is under pressure, creativity remains our most powerful lever to capture attention and drive growth. When combined with a strong platform that can act as a foundation to flex across multiple channels, brands can marry the traditional with the emerging, the physical with the digital, and create a lasting impact.

If we focus on this, we’ll not only drive short-term gains, but enduring brand value and growth.

After all, we’re in the business of ideas, and those ideas should be working to build brands that stand the test of time. Just like the Lionesses who are a force to be reckoned with.