How will media spend shape up in the second half of 2025?

The start of September marks not just a seasonal reset but also the midpoint of budget and planning season and a natural moment to assess how advertisers are allocating spend for the rest of the year.

The opening months of 2025 were anything but stable, continuing a pattern of volatility in recent years. Despite a fragile economy, global trade disruption, changes to national insurance and rising inflation, UK ad spend still climbed 8% to £10.6bn in Q1 2025, according to the latest AA and WARC figures.

However, as in most times of uncertainty, growth was largely driven by short-term formats, including search and online display, as advertisers sought more lower-funnel and performance metrics to prove ROI.

“There’s a lot more downside pressure on the market than upside lift at the moment,” explains WARC’s director of data, intelligence and forecasting James McDonald.

“You’ve got some online players who are doing super well, but the market is really struggling and that probably is going to carry into the next part of the year. It’s just harder to justify brand budgets.”

This is a huge opportunity for us all to think and work differently in terms of speed, delivery and pricing, alongside maintaining human connection and ensuring brands stand out from the pack.

Karla Smith, Ogilvy

After marketing budgets contracted for the first time in four years in Q1, falling to -4.8%, a net balance of 5.5% of panellists reported an increase in overall marketing budgets in Q2, according to the latest IPA Bellwether report.

While McDonald does not expect a dramatic improvement in the economy, he suggests the second half of the year should be less turbulent than the first. Heading into the so-called ‘golden quarter’ – October to December – consumers typically increase spending during key retail events such as Black Friday and Christmas.

At the same time, certain channels are becoming more attractive to marketers. The impact of AI is driving some larger brands to expect more “bang for their buck” from agencies.

“Boardrooms are looking at how AI drives cost efficiencies across their businesses and marketing budgets will be expected to be part of this evolution,” explains Ogilvy UK’s chief financial officer, Karla Smith.

“How brands use and evolve their own platforms – and how they integrate with the offerings their agencies have – will continue to be a conversation that happens throughout H2 with brands expecting efficient solutions at pace.”Brands reallocate budgets ‘tactically’ in Q1 to adapt to ‘wavering economy’

Just five companies accounted for 54% of all ad revenues last year – Google, Meta, TikTok owner ByteDance, Amazon and Chinese e-commerce outlet Alibaba, and this is only expected to increase, according to WPP Media’s latest This Year, Next Year report.

In another sign of changing times between brands and agencies, three months ago, Meta CEO Mark Zuckerberg unsettled the advertising industry by suggesting that its use of AI will automate the entire campaign process.

This change, however, was already underway. The rise of programmatic marketplaces and automated campaign tools has gradually directed budgets toward walled-garden Big Tech platforms, offering advertisers capabilities that allow them to bypass traditional agencies. In an environment where marketers increasingly demand measurable ROI, these platforms are often better positioned to deliver it.YouTube usage outpaces social media rivals over past year, YouGov finds

Social platforms are capturing the lion’s share of reallocated spend. A new Sprout Social survey of more than 1,200 global marketing leaders found 87% found plan to divert funds from other channels into paid social, and over 80% will increase their spend in influencer marketing and organic social.

Of those reallocating budgets, 34% will shift funds from TV to organic social and 23% to influencers. Smith argues the creator economy should be treated “as seriously as traditional advertising”.

“As consumers’ habits evolve so does the placement of media spend. Social and influence continue to be areas of growth that brands are experimenting in to find the right mix, alongside their drum beat of brand story and exceptional customer journeys,” she says.

AA and WARC figures show social spend rose 14.7% year on year in Q1, with further growth forecast. Big brands are taking note. Unilever plans to raise the proportion of its spend on social channels from 30% to 50% this year and to expand its influencer roster twenty-fold.

Meanwhile, Heineken’s Desperados brand is betting heavily on influencer-led campaigns, co-creating content with three influencers who had full creative control.

It’s a shift that has seen ad revenue move away from professional studios, media companies and publications towards individual creators and the platforms that host their content.

WPP Media forecasts that more than half of content-driven ad revenue will come from user-generated platforms such as TikTok, YouTube and Instagram Reels in 2025 – surpassing professionally produced media for the first time. The report predicts creators will generate $184.9bn (£137bn) globally in 2025, up 20% year on year, with revenues expected to more than double to $376.6bn (£277bn) by 2030.

The next step, says Kantar UK and Ireland head of media Hannah Walley, is for brands to refine how they use creators. “Influencers perform well because they’re trusted and authentic,” she explains.Creator content set to overtake professionally produced content in ad revenue, says report

Fragmentation and tighter budgets are also forcing marketers to reassess media mix.

“Marketers were less confident than the year before that they were getting their media mix right. And I’m sure many elements feed into that, but fragmentation has to be one of those,” explains Walley.

And while there may not be a “pull back” of certain channels, Smith notes there is a “strategic diversification” happening.

“Brands understand that a strong marketing plan relies on a mix of channels to build broad awareness,” she says. “It’s often the second or third time a consumer interacts with a brand that nudges them to buy, and in today’s world, those interactions very rarely happen on the same channel.”

Linear TV continues to lose share to subscription video-on-demand (SVOD) and connected TV (CTV). WPP Media forecasts total TV ad revenue – across broadcast and streaming – will rise just 1% to $162.5bn (£120bn) globally in 2025. Streaming TV will account for $41.8bn (£30.8bn) of that, but is expected to surpass 40% of the total by 2030.

“Netflix is doubling down on content, Amazon is building full-funnel solutions,” says McDonald.

Retail media and search

Retail media continues to be one of the fastest-growing channels and a key area of focus for marketers. Spend has quintupled since 2019, with off-site retail media alone forecast to top $28bn (£20.7bn) in the UK by 2028, according to eMarketer. In Q1, search – including retail media – rose 12.3% year on year according to AA and WARC.

The channel is also expanding beyond traditional retailers into sectors such as travel and finance, marking a new chapter of ‘commerce media’.

“We are still expecting there to be further growth within retail media,” says Havas Media Network chief operating officer Simon Bevan. “We are in a transition period, because the setup of retail media within client teams varies, so it’s not always the traditional function of a marketing team, and sometimes it will be with sales.”

WPP Media projects global retail media revenue will reach $169.6bn (£125.9bn) in 2025, growing at 8.2% annually to hit $252.1bn (£187bn) in 2030, when it will represent 18% of total ad revenue.‘This changes everything’: Google’s AI Mode forces brands to rethink search strategies

Elsewhere, search behaviour is shifting as AI tools reshape how consumers discover information, which will ultimately impact how marketers allocate budgets.

Google has introduced AI-powered search features, such as AI mode, while large language models (LLMs) such as ChatGPT are steadily chipping away at its dominance.

Global search advertising is forecast to grow by 7.3% in 2025 to $226.2bn (£167.8bn). In the UK, search ad revenue is set to grow by 7.1% to $21.7bn (£16.7bn), accounting for 39.4% of total ad spend in 2025, according to WPP Media.

“The way people are searching is changing,” says Bevan, who notes that SEO is increasingly being reframed as “search experience optimisation”.

“The path to purchase is changing so quickly,” he adds, “LLMs are changing that at pace, and we’re seeing that when we are in pitches – it has been the big focal point.”

Dentsu forecasts search spend will grow 8.3% in 2025 as the environment fragments further across conversational AI, social search and voice search. Meanwhile, Smith says the rise of AI will also heighten pressure on marketing teams.

“This is a huge opportunity for us all to think and work differently in terms of speed, delivery and pricing, alongside maintaining human connection and ensuring brands stand out from the pack,” she says.