A Journey Towards the Trillion-Dollar Ad Market

As we approach the close of 2024, MAGNA’s latest Global Ad Forecast highlights a remarkable year for the advertising industry. Media owners’ advertising revenues surged to $933 billion in 2024, marking an impressive 10% growth—the strongest in 25 years (excluding the post-COVID boom of 2021). This growth underscores the resilience and innovation within the global ad market, which is on track to approach the trillion-dollar milestone in 2025.

Digital Audio’s Unstoppable Growth

Magna’s report highlights that digital audio has become one of the fastest-growing advertising channels, thanks to its ability to engage audiences in personal, immersive, and mobile-friendly ways. With its share of global ad revenue on the rise, digital audio is outperforming other media formats as listeners shift away from traditional platforms toward streaming services, podcasts, and digital radio.

Traditional and digital audio platforms in the US experienced contrasting trends in 2024. Traditional audio media, which includes radio, generated $12.6 billion in ad revenues in 2024. However, the sector saw a decline of 3.0% compared to the previous year. In contrast, digital audio, which encompasses podcasting and streaming audio services, recorded a moderate growth of 4.2% in 2024, bringing its total ad revenue to $3.2 billion.

Globally, all audio grew by 2% to $29 billion, benefiting from cost-effective ad options compared to television.

Looking ahead to 2025, MAGNA projects that traditional audio media will face a further decline of 3.2% in ad revenues, reflecting a continued shift toward digital formats. Despite this decline, traditional audio is expected to maintain a 3.3% share of the overall U.S. advertising market.

Meanwhile, digital audio is anticipated to sustain its current growth rate of 4.2%, supported by advancements in audience targeting and data-driven advertising strategies.

As a result, ad spending on digital audio is growing rapidly and reshaping marketing strategies across industries.As for verticals to target in the coming year, MAGNA predicts continued strength in CPG, technology, and finance, driven by innovation and economic recovery. However, automotive remains a question mark due to fluctuating trade and government policies.Advertisers are taking note of this shift, recognizing digital audio’s ability to deliver precise targeting, measurable outcomes, and seamless integration into consumers’ daily lives.

Traditional Media Faces Challenges

Traditional media owners (TMO) achieved a notable 4% growth in 2024, reaching $274 billion in ad revenues—their best performance in over a decade. This growth was fueled by an unprecedented number of cyclical events, including major elections in the US, Mexico, and India, as well as global sporting events like the Paris Summer Olympics and UEFA Euro 2024. Non-linear ad sales, such as ad-supported streaming, grew by 12% and now account for a quarter of TMO ad revenues.

Key Performances in TMO:

  • Cross-platform television grew by 5% to $163 billion, bolstered by $6 billion in incremental revenues from political advertising and the Olympics.
  • Out-of-home (OOH) advertising continued its upward trajectory, expanding by 10% to $36.2 billion, thanks to digital inventory and programmatic capabilities.
  • Publishing struggled, with ad revenues declining by 3%, while audio media saw modest growth of 2% due to the rise of podcasting.

Digital Pure Players Lead the Charge

Digital Pure Players (DPP) significantly outpaced the market, with ad revenues climbing 13% to $659 billion. This growth was driven by key segments such as search, retail media, short-form video, and social media. Emerging trends like AI-powered advertising and the rise of retail media networks—which reached $144 billion—further bolstered the DPP sector.

Driving Factors for DPP Growth:

  • Ecommerce competition surged, with brands like Temu and Shein disrupting traditional markets.
  • AI advancements optimized targeting and ROI, enhancing advertisers’ capabilities.
  • Short vertical video monetization soared, with platforms like Instagram and YouTube seeing higher ad revenues.

Regional Highlights

Several regions showed dynamic growth:

  • US and France: Both markets grew by 12%, with the US remaining the largest global ad market at $380 billion.
  • India and UK: Achieved robust growth of 11% each.
  • China: Slower growth at 7%, reflecting a more subdued market compared to other regions.

The US market stood out, driven by $10 billion in cyclical ad revenues and a strong non-cyclical growth rate of 9.9%. Digital ad sales accounted for 70% of the total US market, emphasizing the dominance of DPP.

Sector-Specific Trends

Key industry verticals that propelled ad spending in 2024 included:

  • CPG/FMCG: Brands reallocated budgets from traditional trade marketing to retail media, supporting ecommerce growth.
  • Government and Political: Elevated by high-stakes elections across multiple countries.
  • Technology: Rebounded with AI-powered marketing campaigns.

In contrast, the travel sector saw a slowdown, while automotive advertising continued to evolve amidst fierce competition and the electric vehicle boom.

Looking Ahead to 2025

Although 2025 lacks the cyclical drivers of the past year, organic growth factors are expected to sustain momentum. MAGNA forecasts a 6.1% growth in the global ad market, pushing revenues to $990 billion. Digital formats will remain the primary growth engine, with DPP projected to grow by 9%, while TMO ad sales may contract slightly (-2%).

Key trends for 2025 include:

  • Stabilization of European economies, with inflation rates declining to 2-3%.
  • Continued investment in ad-supported streaming platforms, offering advertisers scale and brand safety.
  • Expansion of retail media networks and programmatic capabilities in OOH advertising.

The Road to a Trillion-Dollar Market

Vincent Letang, EVP of Global Market Research at MAGNA, encapsulates the industry’s trajectory:

“Media innovation is what attracts a growing share of marketing budgets into advertising formats. With no major cyclical drivers in 2025, organic factors will remain at work, stabilizing TMO revenues and growing DPP ad sales.”

As the ad market flirts with the trillion-dollar mark, it’s clear that technological advancements, digital innovation, and strategic adaptability will shape the next phase of growth in this ever-evolving landscape.

As digital audio continues to gain traction, it’s clear that its impact on the advertising landscape will only grow stronger. Magna’s forecast serves as a reminder for brands and marketers to embrace innovation and rethink their strategies to meet audiences where they are: in the digital audio space.

Find out more in the article of Mediabrands to dive into the trends, stats, and insights shaping the rise of digital audio in this pivotal moment for the industry. For more information visit Magna Gobal website.

 

Source: Mediabrands, Magna Global, December 2024