The government is urged not to overlook one of the UK’s most advanced AI areas, as new research from IAB UK reveals that digital advertising is already delivering AI at scale across the economy, with 95% of businesses in the sector currently using the technology.
The call follows new plans included in the King’s Speech to overhaul the digital and cyber regulatory framework. Topics include computer abuse reform, a cybersecurity and resilience bill, a growth regulation bill targeting AI, and a new financial services bill.
However, the IAB findings highlight a significant knowledge gap between the UK’s ambitions to ‘win the AI race’ and the areas currently driving real-world adoption. Although just 16% of all UK businesses report using AI, adoption in digital advertising has reached near-universal levels, making it one of the most mature and commercially embedded AI applications in today’s economy.
The IAB claims that the sector is not only leading the way in adoption, but also delivering measurable economic impact. The UK digital advertising market is worth £40bn, positioning it as a global competitive hub for AI-enabled services, while claiming that AI-powered advertising has the potential to create an additional £12bn of value for UK businesses each year through improved efficiency, targeting and performance.
By incorporating AI into widely used tools and platforms, businesses of all sizes can gain access to advanced capabilities that improve productivity and growth, effectively acting as a mechanism to deliver AI throughout the economy. From automating workflows to enhancing customer targeting and campaign performance, the IAB argues that this sector is turning AI innovation into practical, everyday business outcomes.
The study also shows that adoption is established and accelerating. Around 72% of digital advertising companies have been using AI for at least a year, and 46% say it will be a priority area for investment over the next five years, highlighting the sector’s role as a sustainable driver of AI-driven growth.
In addition to rapid innovation, industry groups argue that the industry is focused on responsible AI. More than half of companies (57%) already have a governance or ethics framework in place to oversee the use of AI systems and data, rising to 76% among large companies. These include internal review processes, clear policies on AI adoption, and continued investment in staff training, demonstrating that innovation and accountability are developing in parallel.
However, the findings caution that this position is not guaranteed. Untargeted or disproportionate regulation that does not take sufficient account of the real-world ways in which industries such as digital advertising use AI could put up to £2 billion of market value at risk and undermine one of the UK’s most globally competitive digital sectors at a time when global competition in AI is intensifying.
The findings suggest that achieving the government’s AI goals will not only rely on supporting emerging technologies, but also on recognizing and supporting sectors that are already enabling at scale. Digital advertising already serves as both a testing ground for AI innovations and a channel through which those innovations are deployed across the economy, supporting productivity, business growth, and competitiveness.
The report concluded: “If the UK is serious about leading the world in AI, it must ensure that digital advertising is recognized as a central part of its strategy, along with a policy environment that supports continued investment, innovation and responsible growth.”
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