Online retail media grew faster than any other category in the UK digital advertising market during the first six months of 2026, rising 32% year-on-year to reach £2bn, according to IAB UK’s Digital Adspend Study H1 2026, produced with mediasense.
The report found that UK digital advertising as a whole grew by 13% to £21.2bn in H1 2026. Video advertising increased by 18% to £5.1bn, while search remained the largest category, rising 10% to £9.1bn. Display advertising grew by 9% to £3.1bn.
Retail media’s £2bn market size now puts it ahead of gaming (£0.7bn), digital out-of-home (£0.5bn) and classified advertising (£0.5bn), underlining the channel’s growing importance to brands and retailers alike.
The study also highlighted ongoing pressures facing advertising investors. Economic uncertainty was cited as one of the top three challenges by 70% of respondents, followed by AI and automation (37%) and measurement (30%).
Spending forecast to grow
Mediasense estimates digital advertising will continue to expand, with investment forecast to rise 12% across 2026 to £45.2bn before moderating to growth of 10.5% in 2027.
The figures suggest retail media remains one of the key engines powering that growth.
“This report is a clear signal of how fast the market is moving,” said Rob Ishag, UK country manager at TripleLift. “Retail media’s 32% growth confirms that commerce data is no longer just a bottom-funnel targeting tool; it’s becoming a strategic layer across the whole customer journey.
“The real opportunity now is offsite, where combining commerce intelligence with context and creative lets brands engage shoppers earlier, while intent is still forming, rather than only capturing demand at the point of purchase.”
CTV mirrors the trajectory
Ishag also pointed to the growing role of connected TV (CTV). The mediasense data found TV advertising delivered via internet-connected devices reached £1.7bn in H1 2026, up 22% year on year.
“As a third of online video investment now flows to TV screens via the internet, advertisers are treating CTV as core to their video strategy, not an add-on,” he said. “For brands, this convergence of retail media and CTV is where the real growth lies, reaching consumers with relevant, contextual experiences across the full funnel, not just chasing conversions.”
Retail media is no longer a fast-growing niche. At £2bn in the first half of 2026 and expanding more than twice as fast as the wider digital advertising market, it has firmly established itself as one of the sector’s most important growth drivers. With offsite retail media and CTV opening up new opportunities beyond retailer websites and apps, the next phase of growth looks set to be driven as much by audience reach and brand-building as by conversion-focused advertising.
