Executive summary 1: Driving growth across the UK economy 2: Spreading this growth across the UK 3: AI as a growth enabler 4: How government can support and maximise growth

Powering GrowthBuilding the UK's Digital Advertising Future

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Executive summary

Digital advertising is one of the UK's most important and fastest-growing industries. In 2022, the IAB published the Digital Dividend, which quantified the economic value of digital advertising to the UK and estimated it contributed £ 129 billion and supported 2 million jobs. Since then, digital advertising's contribution to the UK economy has continued to grow to £ 175 billion, now supporting 2.6 million jobs. That is growth equivalent to the size of the Liverpool City region in only four years.

This growth demonstrates that digital advertising continues to support companies of all sizes to connect with customers more easily and cost-effectively, driving measurable business results and clear consumer benefits by funding free-to-use services on the internet. It also shows the sector's ability to utilise new technologies effectively, including AI and other data-driven innovations, to ensure that adverts are delivered at the right time and to the right audiences.

Given these sustained levels of growth, the UK is now seen as one of the leading markets for digital advertising businesses to take advantage of new technologies and emerging digital channels, including creator marketing, retail media, TV+ and AI enabled advertising. These more data-driven channels with the ability to drive greater performance have the potential to unlock a new wave of national growth for digital advertising as we head into the 2030s – creating high-value jobs and spreading investment and opportunity across the UK's regions and cities. However, this will in part be determined by the policy environment providing the right conditions for this continued investment.

Under a policy environment which prioritises targeted regulation that supports innovation, investment and skills development, digital advertising could contribute £ 242 billion in GVA by 2035 and create an additional 1.2 million jobs. This is the prize at stake if we do not get this right.

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The impact of digital advertising in the UK

£ 175bn

Creating value for the UK economy

Digital advertising contributed £ 175 billion to the UK economy in 2026 and could reach £ 242 billion by 2035 under a policy environment that prioritises innovation and growth.

2.6m

Creating jobs

Digital advertising supports 2.6 million UK jobs and could create an additional 1.2 million over the next decade.

35%

A rapid growth sector

Between 2022 and 2026, digital advertising's contribution to UK GVA grew by 35%, 10x the rate of the UK economy.

£ 1.8bn

Creating value across the UK

Digital advertising could generate an additional £ 1.8 billion of economic value across the UK's cities and regions over the next decade.

£ 118bn

Helping businesses grow

Digital advertising spending drives £ 118 billion in sales growth for UK businesses annually.

£ 53bn

Turbocharging SMEs

Digital advertising spending drives £ 53 billion in sales growth for small and medium businesses.

95%

AI use in action

95% of businesses engaged with digital advertising are already using AI.

£ 80bn

Capturing the AI opportunity

A potential 10% AI-driven uplift in return on advertising spend could generate £ 80 billion in additional UK business sales over the next decade.

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Driving UK growth and enabling small businesses to thrive

For businesses digital advertising is crucial to their daily operations, from a local shop finding its next customer, to a firm testing demand in a new market. It provides a tried and tested route to growth, particularly for small businesses, without needing a large sales team, a national footprint or a major marketing budget. Digital advertising is driving £ 118 billion in annual sales growth for UK businesses, including £ 53 billion for SMEs.

Extending growth across all parts of the UK

Cities across Britain, with established creative and technology businesses, specialist workers, strong universities and high-quality infrastructure, are attracting investment and developing new areas of advertising activity. With the right support, the next phase of growth can spread even more opportunity across the UK adding £ 1.8 billion of economic value across UK cities and regions over the coming decade. Specifically, Manchester, Leeds, Birmingham, Bristol, Edinburgh and Glasgow are poised to benefit most.

Supercharging the next wave of innovation in advertising

Digital advertising businesses are already leading adopters of AI, and translating it into practical business benefits. 95% of businesses engaged in digital advertising are using AI, with 82% reporting higher productivity and 67% improved profitability. Better targeting, measurement and creative optimisation could generate £ 80 billion in additional sales for UK businesses over the next decade.

At the same time, new digital channels such as agentic buying and creator-led marketing are opening up new markets and pathways into entrepreneurship. Over the coming decade, the creator economy alone could grow to £ 12 billion, while agentic buying could generate an additional £ 13 billion in sales.

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Achieving this growth

The future growth of this critical sector of the UK can be bright, but it is not a given. In this report, commissioned by the IAB from research consultancy Public First, we set out the evidence and practical choices needed to help the UK capture the full opportunity from digital advertising, across four key themes. Select a theme below to read that chapter or continue scrolling to read the full report.

01Theme oneDriving growth across the UK economyExplore chapter → 02Theme twoSpreading this growth across the UKExplore chapter → 03Theme threeAI as a growth enablerExplore chapter → 04Theme fourHow government can support and maximise future growthExplore chapter →

Chapter 1: Driving growth across the UK economy

Digital advertising is one of the fastest growing parts of the economy. Its strategic importance has been recognised in the Government's Industrial Strategy and Creative Industries Sector Plan. Its impact reaches far beyond the advertising industry itself, supporting millions of jobs, driving business sales and creating new centres of growth across the country.

Digital advertising is one of the UK's fastest growing industries

£ 175 billion

contributed in Gross Value Added (GVA) by digital advertising to the UK economy in 2026.

2.6 million

jobs supported by digital advertising in the UK, equivalent to one in every 13 workers, or 8% of the UK workforce.

Between 2022 and 2026, digital advertising's contribution to UK GVA rose from £ 129 billion to £ 175 billion – an increase of £ 46 billion, or 35%. This is 10x the growth rate of the UK economy. That increase alone is equivalent in scale to adding an economy the size of the Liverpool City Region in just four years. Employment has grown at a similarly striking rate.¹

Growth Across Different Parts of the Economy (2022-2026)

Digital advertising

35%

ICT

28%

Professional services

5.4%

UK GDP

3.4%

Construction

0.2%

Hospitality

-1.0%

Growth rate - 2022-2026

The benefits of this growth are felt throughout the wider economy – from the supply chains that support digital advertising to the businesses that use it. As digital advertising continues to expand through new channels and technological advances, the benefits spread even wider through businesses, suppliers and local economies across the UK.

The Economic Footprint of Digital Advertising, 2022-2026 (£ billion)

20222026

GVA of direct impact

£ 39

£ 49.7

GVA of businesses that pay for advertising

£ 41.3

£ 52.8

GVA of impact in supply chains

£ 48.5

£ 72.2

Total economic footprint of digital advertising

£ 129

£ 175

The growth in digital advertising has in turn created hundreds of thousands of jobs. The number of jobs supported by digital advertising increased from 2 million in 2022 to 2.6 million in 2026. Against a backdrop of rising unemployment, the addition of 600,000 supported jobs demonstrates the sector's continued capacity to generate opportunity.²

Jobs Supported by Digital Advertising, 2022-2026

20222026

Jobs from direct impact

244,000

325,000

Jobs from businesses that pay for advertising

949,000

982,000

Jobs from the impact in supply chains

839,000

1,322,000

Total jobs

2,032,000

2,629,000

Maximising growth for businesses of all sizes across the economy

Digital advertising is an important and easily accessible tool for business growth, helping firms find customers and scale more quickly than would be possible through traditional channels alone through better targeting, measurement and optimisation.

This is particularly important for the 5.7 million SMEs that form the backbone of the UK economy and rely on online channels to generate sales, reach customers and manage operations.³

Digital advertising spending drives £ 53 billion in sales growth for UK SMEs – more than double the £ 26 billion recorded in the Digital Dividend in 2022 – with particularly strong gains across retail (£ 7 billion), technology (£ 5 billion) and automotive (£ 4 billion) industries.⁴

£ 74 billion

total SME economic footprint of digital advertising, an increase of 40% from 2022.

1.3 million

SME jobs supported by digital advertising, 8% of all SME jobs in the UK.

SME digital marketing contribution and change 2022-2026 (GVA in £ billion)

20222026

GVA of direct impact

£ 18

£ 19

GVA of businesses that pay for advertising

£ 14

£ 24

GVA of impact in supply chains

£ 21

£ 31

The total SME economic footprint of digital advertising

£ 53

£ 74

Empowering the creator economy

The growth of digital advertising will also support new budding industries. Creators increasingly operate as micro-businesses in their own right with minimal start-up costs and far lower barriers to entry than traditional media or retail models.

Where launching a business once required significant capital, physical infrastructure or established distribution networks, digital platforms now allow individuals to monetise skills, expertise and audiences directly. This makes the creator economy one of the most accessible routes into entrepreneurship available today, particularly for those who might otherwise have been excluded from traditional business ownership.

Brands are already integrating creator-led marketing into their wider commercial strategies. In 2025, 52% of UK brands combined creator marketing with their public relations and communications activity. As investment in the channel grows, UK businesses could generate a further £ 9 billion in sales via creators alone by 2035.⁵

These opportunities are being driven by the increasing ability of creators and small businesses to reach large audiences directly through digital platforms. Digital advertising allows creators to monetise audiences through partnerships, sponsorships, affiliate marketing and direct-to-consumer sales, while also supporting wider growth across media, retail, production and creative services.

Impact across the UK

The benefits and impact of digital advertising are not just limited to London and the South East. Cities across Britain, with established creative and technology businesses, specialist workers, strong universities and high-quality infrastructure, are attracting investment and developing new areas of advertising activity.

Manchester: The making of a creative cluster

Between 2017 and 2024, the North West's share of the UK's advertising and marketing workforce increased from 8% to 12%, making it the largest hub outside London. It has built a thriving ecosystem of agencies, ad tech firms and creative businesses, including Havas Lynx, Dentsu and The Hut Group (THG). Together, these businesses have helped establish advertising as a significant employer in its own right.⁶

This success has been driven by a combination of mutually reinforcing factors. Early investment by major organisations such as the BBC and ITV in MediaCity created a visible centre for media and creative activity. The co-location of broadcasters, production companies and specialist suppliers helped support a wider network of agencies and technology businesses. Investment in production infrastructure gave businesses access to capabilities that would otherwise have been difficult to develop independently.

Manchester has also benefited from a deep skills base. Its universities, colleges and training providers support a pipeline of creative, technical and commercial talent. Strong links between these institutions and local employers have helped firms recruit specialist workers, enabling new business to emerge from the wider research and innovation ecosystem, and creating opportunities for highly skilled graduates and professionals to build careers within the region rather than relocating elsewhere in the UK and overseas.

Manchester demonstrates that successful clusters are not created by a single intervention. They emerge where skilled people, infrastructure, established institutions and coordinated local leadership come together to create an environment in which businesses can innovate and grow.

Digital advertising is already a major engine of growth, employment and productivity across the UK, with benefits reaching across different businesses and regions.

Chapter 2: Spreading this growth across the UK

Digital advertising's next wave of growth can spread jobs, investment and innovation even further across the UK. With the right policy environment, existing regional strengths can be utilised to enable these regions to become powerful engines of long-term national growth.

Growth across the country

Under a high-growth scenario with a proportionate policy environment, digital advertising could generate an additional £ 1.8 billion of economic value across the UK's cities and regions over the next decade, generated by innovations in digital advertising technologies like agentic AI.

Digital advertising already supports growth across the country. The next phase offers an opportunity to spread even more of this activity beyond London. Digital infrastructure, cloud services and AI-enabled tools are making sophisticated advertising capabilities accessible across the UK. Growth in new digital channels like retail media and creator marketing is also helping to create new regional centres of excellence, giving local firms, creators and entrepreneurs a greater share of high-value activity. Six cities are best-placed to capture this opportunity: Manchester, Leeds, Birmingham, Bristol, Edinburgh and Glasgow.⁷

City strengths across the UK

Hover over a city to see what drives its growth

Together, these cities combine the core ingredients of successful regional clusters: They have a significant concentration of businesses across the digital advertising ecosystem, including advertising and creative agencies, technology and ad tech firms, media and content businesses, alongside the skilled workers that support them. They also have access to specialist talent and institutions that can connect creative activity with new technology. Birmingham and Bristol also stand out for their scale and recent momentum, giving them significant potential to attract a greater share of future investment.

Digital advertising already supports thousands of jobs in each location, providing a strong foundation for the next generation of highly skilled, productive roles across the digital and creative economy. These are precisely the kinds of skilled roles the UK needs to generate at a time when unemployment has risen and youth unemployment remains a particular concern.

Jobs supported by Digital Advertising in next decade, by city

Manchester

107,000

Leeds

86,000

Glasgow

34,000

Birmingham

30,000

Bristol

30,000

Edinburgh

26,000

Stronger regional clusters would boost the UK's export potential by widening the national skills base, accelerating the development of advanced advertising services and creating more firms equipped to compete for international business.

A plan for delivering regional growth across the UK

Realising the regional opportunity will depend on conditions shaped by government. Businesses need access to skilled workers, strong local networks, digital and creative infrastructure, and a stable regulatory framework.

In areas with established hubs such as Manchester, the priority should be to maintain momentum. This means protecting the supply of specialist skills, ensuring that digital and creative infrastructure keeps pace with demand and helping successful firms access the finance they need to expand. Government should also support stronger links between established local institutions and smaller businesses so that investment benefits the wider regional supply chain.

In other cities, Government must adopt a place-based approach, and deliver the Industrial Strategy and Creative Industries Sector Plan through locally tailored interventions that build on each city's distinctive strengths. Collaborating with local leaders and forming partnerships with industry will help to target investment where it can have the biggest impact.

As the IAB has previously argued, local government programmes could help more businesses use digital advertising effectively through targeted guidance, skills support and funding for digital advertising initiatives. Such support would be particularly valuable for firms, especially SMEs, without dedicated marketing teams or the resources to navigate rapid technological change.

The central lesson is that government must pursue both sides of the regional opportunity: helping established clusters like Manchester scale, while enabling high-potential cities to strengthen capabilities and connections. Done well, this would spread investment more widely, support regional businesses to grow and strengthen the UK's position in the next generation of digital advertising.

Regional action cannot operate in isolation and must be supported by a stable national framework. This is particularly important for smaller and growing businesses, which have fewer resources to manage uncertainty.

Chapter 3: AI as a growth enabler

AI and emerging advertising technologies are opening a new phase of economic opportunity for the UK. Digital advertising is at the cutting edge of this and already commercialising AI by moving it into everyday business use.

Digital advertising is already leading the UK's AI economy

At a time when the UK is seeking to back British sovereign AI and unlock productivity, digital advertising offers one of the fastest and most effective routes for turning technological ambition into tangible economic growth. The UK's digital advertising sector is already a powerful engine of AI investment and adoption, turning cutting-edge innovation into real-world economic activity and supporting the government's growth agenda.

95%

of businesses engaged in digital advertising are already using AI.

Digital advertising is far ahead of the wider UK economy, where just 16% of businesses report using AI. Adoption is not only widespread but well established. Nearly 1 in 5 (17%) digital advertising businesses have used AI for more than three years, while a further 55% introduced it within the past one to two years and 72% have been using AI for at least a year.⁸

The sector's lead is likely to continue, with nearly half (46%) of digital advertising businesses identifying AI as one of their top investment priorities over the next five years.^*

Where we previously relied on manual workflows, we can now talk in natural language to our database via an AI model that turns requests into code, runs analysis and generates outputs. That creates huge automation opportunities and allows us to deliver faster, higher quality insights to clients.

Sam Coates · Global Director of Insight & Analytics, Captify

Digital advertising businesses are adopting AI to generate creative ideas, improve workplace and administrative efficiency, and strengthen audience targeting.

AI is already producing practical, measurable returns. It is saving time, increasing productivity and improving profitability.

65%

of businesses engaged in digital advertising report saving at least three hours per employee through the use of AI.

82%

of businesses engaged in digital advertising say that AI has increased their productivity.

67%

of businesses engaged in digital advertising say that AI has improved profitability.

AI technology enables the next wave of growth for the digital advertising sector

As AI reshapes global markets, the UK is well-positioned to capitalise on this shift - combining leading AI companies, a strong advanced services sector, and a highly skilled workforce. Within this landscape, digital advertising stands out as a clear sector to lead the UK's growth opportunity given it is already translating AI innovation into tangible economic outcomes. Recent IAB data underlines the pace of this shift, with AI-enabled advertising revenues already growing by 24%.⁹

As AI adoption continues to grow across the digital advertising supply chain, improvements in targeting, measurement and creative optimisation are expected to further strengthen the sector's economic contribution over the coming decade.

10%

potential AI-driven uplift in return on advertising spend.

£ 80 billion

in additional sales that this uplift could generate for UK businesses over the next decade.

Supporting AI adoption within digital advertising will generate spillover benefits across the wider economy. As advertisers (from SMEs to large enterprises) gain access to more effective AI-powered tools, the sector will experience broader growth. This reinforces the UK's position in high-value digital services and supports productivity gains across multiple sectors.

Looking ahead, continued innovation in digital advertising technologies is expected to create significant new growth opportunities for businesses across the UK economy. For example, future innovations such as programmatic agentic buying could boost UK business growth by 7%.

New technologies are expected to improve how businesses identify potential customers, tailor advertising to specific interests, measure campaign performance and automate elements of marketing activity. As adoption increases, businesses of all sizes are likely to benefit.

Innovation and responsibility go hand in hand

The scale and speed of technological change make strong governance essential. Alongside rapid innovation, the digital advertising industry is demonstrating leadership in responsible AI and data use. This includes investing in and rolling out the use of privacy-enhancing technologies, clean rooms and aggregate measurement reporting.¹⁰

Rather than waiting for regulation, many businesses are embedding responsible practices directly into how they innovate and operate, including AI training, formal AI use policies, and review processes.

Have you made any changes to your organisations following the establishment of an ethics committee?

More AI training for staff

50%

Greater confidence using AI and audience targeting tools

46%

Formal AI use policies for internal use

40%

Review process of materials before publication

38%

Formal AI use policies in business contracts

37%

We've given people enough flexibility and trust to innovate, while putting frameworks in place that stop things from going wrong. At a company level, we've put in place clear guardrails, such as only using enterprise AI accounts to mitigate data leakage risk. At a team level, we're working to standardise how AI is used, building shared capabilities that can be deployed across the business rather than sitting with individuals.

Sam Coates · Global Director of Insight & Analytics, Captify

Digital advertising offers a practical example of how rapid AI adoption can be combined with effective governance. As policymakers seek to balance innovation with public trust, the sector demonstrates how ethical principles and scalable safeguards can be applied in real-world commercial settings.

Digital advertising can help turn the UK's AI capabilities into higher productivity, stronger businesses and new forms of entrepreneurship at scale. A practical and predictable regulatory environment would support responsible innovation while making the UK more attractive to both domestic and international investors.

Chapter 4: How government can support and maximise growth

Given the strong and sustained growth that has been seen across the whole of the digital advertising sector, it is reasonable to assume that the UK has been seen as a leading market for digital advertising businesses to take advantage of these new channels. However, the ability for this to continue - and for it to deliver economic benefits to the wider UK economy as a result - will in part be determined by the policy environment providing the right conditions for this investment.

The economic prize of the right policy environment

Without clear, proportionate and growth-oriented rules - particularly around data, AI and investment - the UK risks slowing one of its most effective routes for turning technological innovation into commercial activity.

£ 242 billion

in GVA by 2035 under a supportive policy environment, compared with a baseline projection of £ 195 billion.

£ 1.6 trillion

in advertising-related economic activity that could be generated by high-growth segments over the next decade under a supportive policy environment, tripling in size.

Overly prescriptive restrictions on the use of data for personalised advertising, which practically limits privacy-enhancing and interoperable measurement systems, could reduce effectiveness and weaken incentives to invest. At the same time, overlapping requirements across privacy, AI, competition and online safety could compound the problem.

Where businesses face conflicting expectations or persistent uncertainty, investment decisions are delayed, innovation becomes more expensive and the UK becomes less attractive than competing markets. This not only hurts businesses who rely on digital advertising, but also consumers who rely on the free services that digital advertising funds. With less direct investment in the UK digital advertising sector, it is highly likely that more internet services will go behind a paywall or not be accessible at all.

Estimated GVA of advanced advertising sector by 2035 (£ billion)

Supportive Policy Environment

£ 242

Baseline

£ 195

Restrictive Policy Environment

£ 170

The UK must retain its global lead

The UK currently accounts for around £ 40 billion of the global digital advertising market, reflecting its position as a leading hub for advanced advertising services and an important centre for the commercial application of AI.

G7 digital ad spend per capita in 2024

USA

£ 595

£ 505

Canada

£ 250

Germany

£ 181

France

£ 138

Japan

£ 124

Italy

£ 79

That position cannot be taken for granted. A less certain or coherent regulatory environment could weaken the UK's attractiveness as a destination for global digital investment and talent, while allowing faster-moving international competitors to capture a greater share of growth in emerging advertising channels and technologies. This could risk pushing the UK out of the top five global digital advertising markets and weakening its international competitiveness.

-4.7 million

high-value jobs across ad tech, creative industries, media, data and technology services that would not be realised under a more restrictive policy environment.

-£ 2 billion

could be lost from the UK market for advanced advertising services if a new cross-cutting regulatory intervention, with costs comparable to the introduction of GDPR, is poorly targeted or implemented.

How this can be achieved

The economic prize is significant, but it is not guaranteed. Capturing it will require deliberate choices to make the UK the best place to develop, deploy and invest in AI-enabled digital advertising. Five key priorities stand out.

1
A supportive policy environment should combine proportionate regulation with sustained investment in innovation, infrastructure and skills. This means maintaining a clear and coherent framework for digital markets, reaffirming the UK's 2021 Principles for Digital Regulation - including the commitment to forward-looking and joined-up outcomes - and improving coordination through bodies such as the Digital Regulation Cooperation Forum. It also means recognising the UK's effective self-regulatory system for advertising, via the ASA and CAP Codes, and not rewriting these rules unnecessarily.
2
The Government's wider regulatory reform agenda should also embed growth and innovation more clearly in decision-making. Regulators should be accountable not only for delivering their individual mandates, but also for considering the cumulative effect of interventions on investment and international competitiveness. Regulators should be held to account through clear KPIs.
3
Digital advertising should be explicitly recognised as part of the UK's AI growth story. Supporting continued AI development and deployment would accelerate innovation across sectors, strengthening the UK's position in advanced digital services.
4
Greater certainty around the use of data and AI will be central. Policy should avoid unnecessarily prescriptive restrictions on data protection rules that would stifle the benefits of personalised advertising while continuing to support responsible data use and strong consumer protections.
5
Regulatory certainty must be matched by investment in the technical and creative capabilities needed for future growth, including digital infrastructure, specialist skills and stronger links between industry, education and research institutions.

Together, these recommendations would create a more predictable, pro-growth environment for digital advertising – combining proportionate regulation and greater certainty around data and AI with sustained investment in skills, infrastructure and innovation. This would give businesses the confidence to invest and scale, helping the UK capture more of the economic growth.

Supporting SMEs is a priority

All businesses would benefit from a supportive policy environment, but the gains would be greatest for SMEs by allowing them to utilise the benefits of digital advertising. Digital advertising gives smaller businesses an efficient route to new customers and markets, helping them scale without the resources of larger competitors. A simpler regulatory environment would reinforce that advantage.

A less favourable environment would reduce investment in digital advertising and weaken the tools available to SMEs. Higher acquisition costs and less effective targeting would make it harder for smaller firms to enter markets, build demand and scale.

A clearer and more proportionate framework would ensure that the benefits of growth reach the businesses that rely most heavily on digital advertising's accessibility and efficiency, from small retailers and local service providers to independent tradespeople and regional exporters.

The Government has already identified regulatory complexity as a barrier for SMEs through the creation of its Business Regulatory Taskforce. Digital regulation should form a clear part of that work, reflecting the needs of SMEs that use digital advertising and those building advertising technology, services and content businesses.

£ 140 billion

potential shortfall for SMEs between 2025 and 2035 under a less supportive policy environment

Unlocking immediate opportunities

Alongside longer-term reform, the Government has an immediate opportunity to reduce unnecessary compliance burdens around data protection. New powers under the Data (Use and Access) Act could be used to introduce consent exemptions for specified low-risk advertising activities under the existing Privacy Electronic Communications Regulations (PECR), including the limited use of cookies and similar technologies to measure audiences and assess advertising performance.

Businesses report that simpler compliance requirements would save time, improve data collection, and make it easier to innovate.

£ 200 million

in potential additional advertising spend generated from PECR reforms that would allow cookies and other technologies used to measure ad performance and audiences to be used without needing consent¹¹

If UK compliance on data protection and PECR was simpler, would you expect it to have any of the following possible effects on your business?

It would save the business time

44%

It would allow us to capture more data on consumer behaviour

39%

It would make it easier for us to innovate

37%

It would incentivise more investments into new technologies like AI

36%

It would save the business money that could be redirected into other investments

33%

It would incentivise more investments into data analytics

32%

The Government should move quickly to implement proportionate exemptions using its new powers. This would provide an early demonstration of its commitment to regulatory reform while enabling the sector to invest in and adopt emerging technologies with greater confidence.

Technical Appendix

About our survey

An online survey of businesses in digital advertising was fielded in the UK between 18th Feb - 27th February 2026. The sample comprises a total of 258 practitioners in the sector. Public First is a member of the BPC and abides by its rules. For more information please contact the Public First polling team: polling@publicfirst.co.uk

Chapter 1

GVA impacts of digital advertising

To quantify the economic impact of digital advertising in the UK, Public First had to draw on a range of data sources, make reasoned assumptions in places and apply a standard approach to economic impact modelling.

The measure captures economic output (GVA) and jobs supported by digital advertising in the following areas:

The advertising and marketing sector (e.g. ad agencies);
Advanced advertising: ad tech, retail media, and influencer marketing;
Industries in which digital advertising is a source of revenue - search, social media and other online content, online newspapers, online radio and on-demand TV; and
Jobs supported by the businesses paying for advertising, and benefiting from the return on ad spend (ROAS) in terms of greater sales.

Digital advertising as a source of revenue

Using ONS data on the ratio of GVA to turnover in different industries, and Annual Business Survey data on turnover per job in each industry, Public First quantified what this revenue uplift meant in terms of jobs and GVA.

Here, Public First adopted broadly the same approach as the Advertising Association\u2019s original Advertising Pays report. Depending on industry, this involved adopting one of two approaches, or in some cases a mix of these:

A revenue-attribution approach - drawing on individual company financial data on digital ad revenues as a share of total revenue to establish the share of jobs supported. E.g. if 80% of company revenues are from digital advertising, 80% of the jobs are said to be supported by digital advertising.
A value-added approach - where such a breakdown of individual company finances is not available, data from the ONS Annual Business Survey and ONS Business Register and Employment Survey were used to establish the amount of jobs supported per million pounds of revenue in each industry. Multiplying this by digital ad spend data gives a number for jobs supported.

AA/WARC data was used to establish digital ad revenues by sector. This approach was used for online social media platforms, audio, video on demand, newspapers, Connected TV, retail media and influencers.

Jobs supported in digital advertising

Digital advertising also supports jobs for the businesses paying for advertising space - through the additional sales that advertising brings in - i.e. the return on advertising spend (ROAS). There are numerous estimates of ROAS. Public First drew on research by Thinkbox which suggests an average ROAS of 3.33. This was higher than the ROAS used in the 2023 Digital Dividend report. Using AA/WARC data on digital ad spend, and IAB UK data on the industries paying for advertising, Public First estimated the increased revenues for businesses from the ROAS.

Indirect GVA and jobs

Public First\u2019s headline numbers also include GVA and jobs supported along supply chains (\u201cindirect impacts\u201d). To do this, Public First used its in-house economic model which draws on ONS \u201cinput-output\u201d tables which detail the interrelationships between different parts of the economy.

GVA and jobs forecasts

The GVA direct value estimates for the sectors: ROI in advertising, ad tech, connected TV, retail media and influencer marketing are used as the baseline for the forecast. Where existing IAB research has been conducted on growth in these sub-sectors such as in the IAB 2025 Adspend report and growth of retail media, these estimates have been used in constructing the baseline. The growth rates for ad tech, connected TV and influencers have used external forecasts.

The growth rates for each subsector are assumed to remain the same between 2025 and 2035. This is a reasonable assumption given they are a fast growing sector and that downside or upside assumptions cannot be justified without more information into the growth trajectory of the UK or sector.

The two policy environments are developed as follows:

A supportive policy environment is estimated by looking at the fastest growing countries in the sector, like the US. This growth rate, which is higher than the combined baseline growth rate, is used as the supportive policy scenario.
An unsupportive policy environment is estimated based on the growth rate of UK peer countries with lower growth but a similar economic landscape. This is similar to EU countries such as Germany and France. The digital advertising growth rate in these countries is still high but lower than the baseline.

The same growth rate is assumed between the GVA forecast and the growth rate for sectoral jobs. This is due to limited data on the difference between growth in GVA and the growth in jobs within these sectors.

Creator growth

Public First used global and UK influencer advertising spend data from Statista, available until 2030. Forecasts to 2035 are extrapolated using existing data, and establishes influencer ad growth over the next decade. ROAS estimates of 3.33 produced by Thinkbox were used to estimate the return on additional ad sales.

Chapter 2

Economic value of innovations outside London

Public First used estimates from their economic impact assessment on the value of ROI from digital advertising as the baseline. Regional estimates on the size of the advertising sector, produced by BiGGAR Economics, is used as the basis to extract the contribution of London and regions outside of London to digital advertising.

IAB survey data stating the share of companies currently using tools such as agentic buying is used as an approximation for the distribution of agentic buying across regions. Public First then multiplied this figure by the average ROAS figure of 3.33 produced by Thinkbox. The difference between the baseline value and the impact post-ROAS is the value added due to innovations such as agentic buying.

City job clusters

Public First defined digital advertising clusters as London, Manchester and Leeds, where the sector contributes to almost 50% of activity across the UK. The cities are taken from analysis in Advertising Pays, which estimates the concentration of jobs through LinkedIn Talent data. GVA values for the fastest growing areas such as ad tech, connected TV and retail media are taken from the economic impact model, as current values and estimates to 2035. These differences are apportioned across the three city clusters and the difference subtracted, over the next decade.

Regional GVA impact

Public First uses the estimates from their economic impact assessment on the GVA and jobs impact of digital advertising over the next decade. The cities are based on analysis from Advertising Pays, which estimates the concentration of jobs through LinkedIn Talent data. The GVA and jobs growth is apportioned using this concentration ratios across each city.

Ad tech accelerator value

Public First used Data City estimates for the total number of ad tech companies in the UK, adjusted with data from Beauhurst estimating the share of ad tech firms based outside London. Company growth rates - those growing above 20% a year - are taken from Data City, and defined as a scale up in this analysis. The value of an accelerator programme is the median per business value of two programmes: Digital Growth Grant and UKRI\u2019s Innovator Accelerator. The additional investment generated from the ad tech accelerator programme is based on evaluation of the Creative Industries Cluster programme.

Chapter 3

AI-augmented personalised advertising

Public First used the IAB 2025 Adspend report to determine the sector\u2019s current level of ad spend. Evidence across the various channels used for digital advertising suggests on average return on ad spend (ROAS) multiplies by 3 for each pound spent. AI effectiveness is estimated using research by McKinsey. Multiplied together the uplift on ad spend due to the increased effectiveness of AI is estimated to be \u00a312bn for the sector.

AI uplift on digital advertising

The estimate on the effectiveness of AI in increased return on ad spend is used as a foundation. Industry estimates suggest that AI improves advertising effectiveness through better targeting, automated optimisation, and enhanced bidding and creative generation. Ad effectiveness is used to estimate the full potential impact of AI, which looks at two avenues: 1) ROAS uplift value and 2) the AI ROI effect.

ROAS uplift value used an average ROAS benchmark from the literature (~\u00a33 in this case). The AI uplift is based on research by McKinsey, using the lower bound of 10%, on the return on investment generated by adopting AI tools. Since this figure estimates at its full potential AI-advertising could generate a 10% uplift in ROAS, the scenario assumes this 10% can be reached within the 10 year period when AI adoption is widespread.

Value of agentic buying

Public First used estimates from their economic impact assessment on the value of ROI from digital advertising. ROAS estimates of 3.33 produced by Thinkbox were used to estimate the return on additional ad sales, and multiplied by the impact of agentic buying on ROI. IAB survey data is used to determine the share of businesses who are not currently using agentic buying, and will benefit from the productivity and sales uplift.

Chapter 4

Negative shock to advertising sector

Public First used the IAB\u2019s 2025 Adspend figures to determine the sector\u2019s current level of ad spend. A negative policy shock is assumed to impact 34% of digital advertising and research from Goldberg et al. (2024) estimates the reduction in website views of 12% is used.

PECR reforms

Public First assumes that changes to PECR would increase cookie collection by 22%, leading to an increase in ad spend. The analysis is restricted to the use of UK adults, ages 16 and above, of whom 18% reject cookies on a daily basis. The analysis is primarily limited to open display digital adverts, as this medium uses cookie-based targeting most, and makes up 14% of all digital ad spend.

Endnotes

GVA measures the value an industry adds to the economy. In simple terms, it is the value of what the industry produces, minus the cost of the goods and services it buys in to produce it — such as media space, ad-tech platforms, creative production, data services, analytics, software and hosting.
Digital advertising also supports jobs for the businesses paying for advertising space - through the additional sales that advertising brings in - i.e. the return on advertising spend (ROAS). Public First estimated the increased revenues for businesses using the ROAS.
DBT (2025) Business population estimates for the UK and regions 2025: statistical release
This estimate draws on research by IAB UK (Powering Up Report 2023) on the share of digital advertising spend attributable to SMEs and spend by industry from IAB UK Industry Sectors Report 2025.
Kolsquare, The State of Influence Marketing in Europe 2025
Advertising Pays 2025 (Credos / Advertising Association, 2025)
The cities are based on analysis from Advertising Pays 2025 (Credos / Advertising Association), which estimate the concentration of jobs through LinkedIn Talent data
AI Adoption Research, GOV.UK, February 2026
IAB (2026) Futurescape
Full definition here
Public First analysis. The analysis assumes that changes to PECR would increase cookie collection by 22%, leading to an increase in ad spend. The analysis is primarily limited to open display digital adverts, as this medium uses cookie-based targeting most.