The advertising world is experiencing a significant evolution, with growth trajectories that promise unprecedented changes in how brands engage with consumers. As we look forward to 2024 and 2025, the global advertising market is poised for a remarkable leap, with projections indicating a 10.5% rise in ad spend that will exceed the $1 trillion mark for the first time in history.
The Numbers Speak
According to WARC’s latest forecasts, global ad spending is expected to reach an impressive $1.07 trillion this year. This represents the best performance in six years, particularly notable when excluding the anomalous post-COVID spike in 2021, which saw a staggering increase of 27.9%. The upward trend is expected to continue, with forecasts of 7.2% growth in 2025 and 7.0% in 2026, culminating in a total global ad market value of $1.23 trillion by 2026—an 80% increase compared to pre-pandemic levels in 2019.
This remarkable growth is primarily driven by three dominant players: Amazon, Alphabet, and Meta, which command more than 70% of the incremental ad spend. By 2024, these companies are projected to attract a staggering 43.6% of total ad spend, increasing their share to over 46% by 2026.
Insights Backed by Expertise
WARC, with over 40 years of advertising data at its disposal, rigorously analyses market trends. Their innovative forecasting utilises a state-of-the-art neural network machine learning model that processes over two million data points, incorporating economic indicators and changing patterns in media consumption. This robust methodology ensures one of the most accurate forecasts in the advertising industry.
The forecast is especially favourable for online-only businesses, which are set to see a remarkable 14.0% increase in advertising revenue in 2024, reaching $735.7 billion. Notably, this year, 88.5% of the incremental advertising dollars will be allocated to these businesses, with over half (52.9%) directed towards the Big Three—Alphabet, Amazon, and Meta.
Channels of Growth
Digital channels are leading the charge, with key segments such as retail media, social media, and search expected to drive this growth. These three sectors will make up over 85% of online spending. Retail press, in particular, is forecasted to see an extraordinary rise of 21.3%, while social media and search will grow by 14.2% and 12.1%, respectively.
An intriguing trend to note is social media’s dominance as the largest advertising channel, which now constitutes 22.6% of global ad spend. The competition is heating up, especially for Meta’s market share, which is currently at 62.6%. Meanwhile, competitors like ByteDance, the parent company of TikTok, have made significant gains, with TikTok alone projected to bring in over $28 billion in ad revenue next year.
In contrast, traditional legacy media, which includes print, broadcast, and out-of-home advertising, has seen its share of ad spending decrease steadily over the past 15 years. This year, legacy media will account for 25.3% of the total advertising spend, totalling $270.5 billion. However, the growth attributed to political advertising in the U.S. underscores the delicate balance between resurgence and decline in traditional media investment.
Conclusion
The global advertising landscape is transforming, and the coming years promise ample opportunities for growth and innovation. With brands pouring more resources into digital channels and leveraging advanced technologies like AI, the future of advertising looks exceedingly vibrant. As we enter this new era, it will be crucial for businesses to navigate this evolving landscape to maximise their advertising impact and consumer engagement effectively.
Stay tuned for more insights as we monitor these trends and their implications for the global advertising industry. Download the full version of the WARC report here.
