Digital OOH strong as UK ad spend rises in Q1

The latest AA/WARC Expenditure Report reveals robust growth in the UK advertising spend, which surged by 8% to reach a total of £10.6bn in the first three months of 2025. While search, including retail media, largely drove this uplift, the Out-of-Home (OOH) sector, particularly its digital formats, demonstrated significant and sustained strength, reinforcing its crucial role in the evolving media landscape. 

In Q1 2025, Out-of-Home advertising continued its robust performance. Analysis of spending by format reveals that Digital OOH spend reached approximately £250 million, significantly outpacing Traditional OOH, which stood around £120 million. While Traditional OOH experienced a relatively flat or slightly negative year-on-year change, Digital OOH maintained a positive year-on-year growth of approximately 5% in the first quarter, highlighting the ongoing shift and investment within the OOH sector. Beyond OOH, Cinema advertising also experienced exceptional growth in Q1, soaring by 19.2%.  

For the entirety of 2025, the UK advertising market is now forecast to grow by 6.8% to £45.4bn, a slight increase of 0.4 percentage points since the April forecast. Despite the UK’s overall GDP growth remaining relatively flat at 1.1% for the year, the advertising sector is still projected to see a 3.5% growth after inflation. Within this positive outlook, Out-of-Home (OOH) advertising is specifically forecast to grow by +3.1%, with digital formats expected to continue driving this expansion, as evidenced by the forward trajectory shown in recent expenditure reports. Cinema is also anticipated to maintain strong momentum, with a forecast growth of +9.0% for the year. Other channels like TV Video-On-Demand (VOD) (+10.1%), search (+9.4%), online display (+9.2%), and radio (+1.2%) are also predicted to contribute positively to the market’s expansion. 

Looking further ahead, the AA/WARC’s forecast for 2026 remains unchanged, predicting the advertising market to grow by 5.6% to reach £48.0bn. The vital role of advertising as a key economic driver was further underscored by the AA’s recent report, Advertising Pays 2025, which highlighted advertising’s contribution of 4% to total UK GVA in 2024. 

Stephen Woodford, Chief Executive, Advertising Association said: “Further growth in the first quarter of 2025 is welcome, particularly following the launch of the UK Government’s new industrial strategy which recognises advertising as a priority sector. The announcement that brand advertising will be exempt from the incoming Less Healthy Food restrictions has also provided important clarity for advertisers, ahead of the industry’s agreement to implement these from October 2025. With our latest Ad Pays 2025 report showing advertising supports 1.7 million jobs, we will continue to monitor advertising expenditure and work with the Government to highlight advertising’s contribution to the UK economy.” 

James McDonald, Director of Data, Intelligence & Forecasting, WARC, said: “The latest survey data highlights buoyancy in certain corners of the UK ad market, with total investment growing just ahead of forecast despite a wavering economy and a sustained period of global trade turbulence. Advertisers were seen to pull budgets forward and double down on agile formats within search, social, and retail media in response to the volatility sparked by new US tariffs. Brands appear to be adapting to the current environment by reallocating budgets tactically, with the outlook for the year remaining broadly positive despite persistent headwinds.”