The report found that ad spend hit £10.6bn in the third quarter, with the increases attributed to improved performance for search and growth in online formats.

Search (including retail media) which was up 12.6% to £4.6bn, with online display (up 15.2%), online radio ( 10%) and broadcaster video-on-demand ( 8.7%) also performing well.

Direct Mail had a particularly strong quarter with a rise of 12.9%, marking a return to growth for the first time in more than two years, and radio performed ahead of expectations with growth of 3.8%.

Financial (up 6.9%) and consumables ( 4%) were the categories that raised their depending in the third quarter of 2024, and of the latter, household fast-moving consumer goods at 21% and food at 7.6% were the key growth areas.

The latest results mean that the UK advertising market is forecast to have grown by 11.2% overall in 2024, an upgrade of 0.6 percentage points from the AA and Warc’s October forecast, with full year spend expected to reach £40.7bn.

Channels expecting to see a strong 2024 include online display (up 18.9%), search ( 12.7%), broadcaster video-on-demand ( 12.4%) and out of home ( 10.3%).

In addition, the AA and Warc said they anticipated additional growth of 6.9% in 2025, by when the UK’s ad market will be worth £43.5bn, with the advertising market expected to show real terms growth of 8.5% in 2024 and 4.5% in 2025.

Stephen Woodford, chief executive at the AA, said: “While there is much work to do to kick start growth in the UK economy, we know investment in advertising produces a fantastic return.

“It is also important to reflect on how policy decisions can impact the planning of advertising campaigns, such as through the delayed resolution of the Less Healthy Foods regulation. This is a clear example of where businesses require certainty to have the best chance to deliver growth.”

James McDonald, director of data, intelligence and forecasting at Warc, added: “Online ad formats, benefitting from the widespread adoption of new AI tools, have propelled the UK ad market to exceptionally strong growth so far in 2024 and will continue to drive expansion into 2025.

“However, economic uncertainty remains at both a local and global level. As a new US president comes into office, attention will be focused on implications for the world economy.

“In the UK, advertising businesses will look to the UK government’s growth strategy and how it will affect the industry. A deterioration in overall business confidence could lead some marketers to depress spend in the short term.” 

Reaction

Mike Follett, chief executive and founder, Lumen Research
Increased ad spend and strong forecasts for growth in 2025 will leave marketers feeling optimistic for the year ahead, but a glaring question remains — are investments in advertising delivering attentional value for money? The most expensive ad in the world is the one no one looks at. 

To put it simply, attention predicts profit. Looking at media optimisation through the lens of real human attention is the best way for marketers to avoid wastage and deliver increased sales. That’s true value for money. 

Phil Duffield, vice-president UK, The Trade Desk
AA/WARC’s latest report confirms digital advertising’s role as a key driver of business growth, with brands increasing spend across all channels to align with evolving consumer behaviour.

Research from The Trade Desk shows omnichannel campaigns are 1.5 times more effective than disconnected ones, proving that seamless, audience-first strategies drive impact. With strong ad spend forecasts for 2025, brands that connect channels effectively to reflect consumer behaviour will see the greatest returns.

To maximise return on ad spend, advertisers must prioritise standardised cross-channel measurement to unlock the full potential of data-driven insights and identify what is and isn’t working, while optimising in real time.