Digital Adspend H1 2026: find out the fastest growing part of the market

James Chandler (0:00)

Hello, James here, welcome back to The IAB UK Podcast. It is half year ad spend launch day today, so we're looking at the first six months of 2026 and how much money has gone into digital advertising. The big number is coming in a moment, but to talk to me about it, I've got Elizabeth Lane, who is the IAB's head of insight, and Adam Edelshain, he's VP of client service at Media Sense, the partner we work with the ad spend study on. Loads of numbers coming your way, various percentages, what's up, what's down, how we're pitted against GDP, and all the rest of it. There's lots here, let's get into it.

Adam Edelshain (0:37)

Welcome to the IAB UK Podcast.

James Chandler (0:41)

Thank you very much for joining us. Let's start with the big number. Where did we get to for the first half of this year, Elizabeth?

Elizabeth Lane (0:46)

So the report that's come out today looks at the first six months of 2026 for digital ad spend. And what we saw is that revenue for the first half of this year hit 21.2 billion pounds in revenue, which is a big number. And that itself was up 13% compared to this time last year. So if you take the first half of 2025 and the first half of 2026, a 13% increase year on year. Double digit number, very big. I think what's quite helpful sometimes is to put a bit of context around that.

And 21 billion for just six months of the year, if we compare that to six years ago, 2020, the whole year of Digital Adspend, we hit 16.5 billion. So the rate of change, that double digit growth we've seen year on year consistently, means that this time around in just six months, we have overcome, overpassed that, and we're at 21 billion in revenue.

James Chandler (1:45)

We're kind of used to this double digit growth in digital. We're spoiled in a sense.

Anything in that number that surprised you, though?

Elizabeth Lane (1:54)

Well, yeah, you're right. We do see that over and over again, but I think using that context always means that that number is still striking. But the headline number, and we say this every time, is never the story. It's what's happening behind the scenes and seeing where that growth is coming from and how the digital advertising market is beginning to sort of diversify. That's where the interesting thing, interesting stories come. So, for example, there's a lot of talk about, you know, is this the end of search? But actually, no. One of the surprising things in this half year is that search is still holding up. 43% of all of that 21 billion comes from search revenue. So it's still holding up.

And then there are other areas that are growing at a rapid rate. So retail media being one, video continuing to be one of the big driving forces in digital advertising. And within that, we're starting to see TV Plus, that streaming part of video really taking off and growing and driving digital advertising.

James Chandler (2:55)

The death of search has been much overstated depending on what you read and things like that. But Elizabeth says, Adam, you're holding up pretty strong at 43%.

Adam Edelshain (3:04)

Search is definitely still doing well. 10% growth is fantastic. That being said, we will see some structural change to search with the advent of AI search in a big way. I think what was really interesting from some of the qualitative interviews that we conducted is that there's a general consensus that there's a behavioral shift from looking at information through search to supporting decision-making.

And as we see more of that, we're going to see a number of different impacts from a reduction in referral traffic as AI summaries allow for people to get the information they need without going any further. But at the same time, the value of advertising associated with AI search is likely to be much more significant because consumers are so far much further down the decision journey. So lots of impacts there. And then also content is going to have to change because media owners and brands are going to need to think about how searchable they are in this new AI environment.

James Chandler (4:11)

Yeah, and that feels like everything we're hearing around LEO or whatever EO we put on that comes after SEO. Everyone's trying to really figure out that bit around how you get surface, how you get cited in some of these things. We're talking about sort of bottom of the funnel decision making there. At the other end of the spectrum, retail media, huge success story here, partly because it's a bit more kind of top of funnel, more seen as brand buildings, up there with video, tremendous growth in the last six months.