Retail media is a key driver of the growth currently being seen in the UK digital ad market – along with social media, video, and audio.
That was one of the findings from the IAB UK’s Digital Adspend 2025 report, conducted in partnership with Oliver Wyman and released this week. Overall in 2025, the UK’s digital ad market saw 9.6% growth, with a total digital ad spend of £40.4 billion.
Online retail media was responsible for £3.7 billion of that spend (just over 9%), representing a 17% year-on-year growth compared with figures from 2024.
In the words of Tristan Silva, Insights Manager at IAB UK, speaking at the report’s launch: “Retail media is growing really, really fast.”
Looking ahead to 2026: capability-building and in-store to the fore
The report highlighted that this growth is expected to slow somewhat over the next 24 months as the market matures and players prioritise infrastructure.
The recent period of rapid expansion has brought with it fragmentation and uneven capabilities among different entities – a level of complexity that presents a risk when scaling further.
With that said, spend is still expected to continue rising: retail media was named as the second-biggest ‘winner’ of 2026 in terms of spend growth, behind only video. Three quarters (74%) of IAB UK members predict that retail media will gain spend in 2026, with a quarter (26%) believing it will stay level.
Economic pressure is seen as a driver of this spend growth, with budgets being reallocated from less measurable channels towards those focused on performance. Elsewhere in the report, increased pressure on ROI was revealed as one of the top three perceived challenges for digital advertising in 2026, cited in 48% of IAB UK member interviews – behind AI and automation (74%) and measurement and transparency (57%).
The report also observed that in-store is emerging as a key competitive advantage over pure digital players – something that will let retail media cater to the wider funnel, as the IAB UK’s Head of Retail Media, Olivia McCullagh, pointed out in her most recent piece for Retail Media Age.
As one head of sales in retail media told the report authors, “Unlocking omnichannel opportunity means that we can service that customer [across] every single stage of that journey.”
“It’s not a monolith”: Reaching customers with the right retail media platform
Also speaking at the Digital Adspend 2025 launch event, Amanda Woodley, Head of Clients at Ipsos UK, shared insights from the Ipsos Iris Online Audience Measurement Service that highlighted what different retail players have to offer.
“[With] the clear diversity of this category [retail commerce], it’s not a monolith,” she emphasised. For example, Amazon clearly leads the global commerce giants, reaching more than 90% of the UK’s online population; but challengers like Temu and Shein (who rank third and fifth respectively in terms of sheer audience size) are nipping at its heels with aggressive pricing strategies.
In terms of British grocers, Tesco leads the way in terms of sheer reach with an average audience of 20.4 million consumers per month in 2025; but Asda is sitting in second place with 15.8 million – and Lidl is only just behind it with 15.3 million, despite its lack of an ecommerce offering. “Consumers are still flocking to the site in the millions per month – highlighting how important value-driven shopping remains to the digital habit,” said Woodley.
She also pointed out that retailers’ loyalty schemes “command their own massive digital footprint independent of their core store online presence”. Tesco Clubcard and Sainsbury’s Nectar scheme, to name the two biggest hitters, can call on data from an estimated 24 million households apiece (per Tesco’s Interim Results and Nectar360’s website).
Among the major high street brands, the biggest hitter is Argos (with a monthly audience of close to 19 million) with a combination of scale and diversity; M&S and John Lewis deliver premium quality and trust, while Boots reaches one in three Brits with its health and beauty offering.
As Woodley summarised, “To succeed in 2026, you cannot just buy retail media,” as the different players run the gamut from scale to convenience to a premium and trusted offering. “Choose a platform that matches your customers’ mindset.”
