What The Latest UK Ad Spend Numbers Are Really Telling Marketers

UK digital ad spend is still growing strongly but the most important story is where value is moving next.

In this article, Helen Mussard, VP of Marketing, AUDIENCES, looks at the latest IAB UK and MediaSense Digital H1, 2026 Adspend Study, drawing on her experience at IAB Europe to explore the signals behind the headline numbers.

From retail media’s 32% growth to the rising importance of first-party data, programmatic automation and better measurement, the report points to a market becoming more focused on usable audience signals, interoperability and commercial outcomes.

Helen also considers what could hold further growth back including fragmentation, measurement complexity and trust, and what marketers should prioritise as digital advertising moves into its next phase.

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By Helen Mussard, VP Marketing, AUDIENCES

Having spent more than six years at IAB Europe as CMO, and much longer working across digital advertising and marketing, I’ve seen first-hand how useful robust market data can be.

Adspend studies are sometimes treated simply as a scorecard for the industry: how big is the market, which channels are growing, where is money moving? But the real value is in the signals beneath those numbers.

At IAB Europe, our Chief Economist, Dr Daniel Knapp, would pull together the European view of the market, helping members understand not only how digital advertising was performing overall, but where growth was coming from, where confidence was weakening and what might be getting in the way of further investment. We would often follow the data with dedicated member webinars and industry discussions focused on interpreting the findings and understanding the broader forces shaping the market. These sessions helped members put the data into context: which trends were becoming more significant, which structural challenges were affecting confidence, and where the industry might need to focus its attention next.

For me, that was one of the most useful parts of the process. The numbers gave us the evidence; the discussion helped turn that evidence into a clearer view of the market.

We all want to see continued confidence and investment in digital advertising but that means looking beyond the growth figures and asking a second set of questions: what is holding advertisers back, and what does the industry need to do about it? That is the lens I tend to apply to adspend data today.

The latest IAB UK and MediaSense Digital Adspend Study for H1 2026 gives us plenty to think about.

UK digital advertising spend reached £21.2 billion in the first six months of 2026, up 13% year on year. Search remains the largest category at £9.1bn, while video accounts for £5.1bn and display £3.1bn. But the headline growth number is only part of the story. For marketers, the more useful question is where that growth is happening, what is driving it and where value is moving next.

Retail media is moving into its next phase

Online retail media grew 32% year on year to £2bn, making it the fastest-growing category in the study. Some 45% of respondents also identified retail media as a top-three growth driver. Digit ad spend

Anyone working in the sector will have seen how quickly retail media has moved from an emerging revenue opportunity to a core strategic priority. What interests me now is what happens next.

The report describes retail media as evolving into a strategic, omnichannel proposition rather than simply a performance channel, supported by first-party purchase data and connected customer touchpoints. The long-term value here is unlikely to come simply from creating more inventory on retailer websites. It comes from the customer relationship and the signals sitting behind it and from making those audiences useful across a much broader media ecosystem.

The barrier is equally clear. The report says off-site activation remains fragmented across partners, interfaces and measurement.  That is where marketers should pay attention. Growth creates confidence, but complexity can quickly become a brake on investment. If retail media is to fulfil its potential, activation needs to become easier, measurement clearer and the connections between environments less fragmented.

First-party data is moving from strategy to execution

First-party data has been an industry talking point for years. The conversation started with ownership and collection, then identity, privacy and consent. Now we are in a much more practical phase: Can marketers actually use the data they already have?

The report highlights first-party data, premium inventory and measurable ROI as becoming increasingly valuable to advertisers. Its measurement section goes further, noting that marketers increasingly want to understand incrementality, customer acquisition, market share and overall business impact and that organisations able to use first-party data to connect audience exposure more closely with commercial outcomes have an advantage. 

For years, having a strong first-party data strategy was itself considered a marker of maturity, today, the differentiator is activation. Having millions of customer records sitting in a data warehouse does not automatically create marketing value. That value comes from turning the data into usable audiences and signals, activating them effectively and measuring what happens next.

For marketers, the question is increasingly less “Do we have first-party data?” and more “How much of it is actually influencing our media?”

Programmatic is now the infrastructure

Another number worth stopping on is the programmatic share of the market. 81% of UK digital advertising spend is now programmatic, up from 78% in H1 2025. That equates to £17.2bn in just six months. 

Having watched programmatic develop over the years, this is a useful reminder of how quickly something once considered a specialist part of digital advertising can become the underlying infrastructure of the market. For marketers, the question is no longer whether buying will be automated. It already is.

The more important question is what data and signals are informing those automated decisions. That becomes even more relevant as AI moves further into campaign setup, optimisation, creative and analysis. The report points to growing use of AI across all of these areas. There is rightly a huge amount of attention on automation and AI at the moment, but smarter technology does not reduce the need for good inputs. It increases it.

The effectiveness of automated decisioning will depend heavily on the quality, relevance and availability of the signals feeding it. AI may change how decisions are made, but the competitive advantage will still come from the quality of the data behind those decisions.

Measurement is becoming a business conversation

Thirty percent of respondents cite measurement as a top-three challenge. That number is not especially surprising. Measurement has been one of digital advertising’s enduring challenges. What is more interesting is how the definition of good measurement is changing.

The report points to increasing demand for incrementality, customer acquisition, market share and overall business impact, while also acknowledging the limitations of trying to demonstrate perfect attribution. That is a really positive direction for marketers.

Over the years, I have seen the industry become very good at producing more data and dashboards but the harder question has always been on whether those metrics help a business make better decisions. Media measurement should ultimately help answer commercial questions. As budgets remain under scrutiny, marketers will increasingly need to demonstrate not just that media delivered impressions, clicks or conversions, but that it contributed to meaningful business outcomes.

One thing I learned from those IAB member discussions is that the biggest barriers rarely sit with one part of the ecosystem alone. Measurement, privacy, interoperability and transparency all cut across brands, agencies, publishers, platforms and technology providers. No single part of the market can solve them in isolation.

That is important when we talk about confidence in digital advertising. Growth is encouraging, but sustained confidence depends on making the ecosystem easier to measure and easier to trust.

If advertisers can understand what is working, compare performance properly and demonstrate value internally, investment follows. When measurement is fragmented or overly complex, it becomes much harder to make that case.

Where should marketers place their attention?

Looking across the report, I would focus on four things.

First, make first-party data usable.
Most organisations do not have a data shortage. They have an activation challenge. The ability to turn existing customer data into meaningful audiences and signals is where the value increasingly lies.

Second, watch the evolution of retail media closely.
The 32% growth is impressive, but the more important development is the move towards omnichannel activation and whether the industry can solve the fragmentation that currently comes with it.

Third, invest in audience capability, not just channels.
Media environments will continue to fragment. A strong audience strategy gives marketers something consistent to build around.

Fourth, bring measurement closer to commercial outcomes.
The strongest marketing organisations will be those that can connect customer data, audience activation and media investment back to the things the business actually cares about.

MediaSense estimates that UK digital advertising will grow around 11.5% in 2026 and a further 10.7% in 2027, taking the market to approximately £50bn.  So the opportunity remains substantial. But after working in this sector for a long time, the part I find most interesting is not simply that digital advertising continues to grow, it's  how the source of competitive advantage keeps changing. We moved from scale, to targeting, to automation.

The next phase looks increasingly centred on data quality, direct audience relationships, interoperability and the ability to connect marketing activity to real business outcomes. Those are the signals in this report I will be paying attention to.

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