Global advertising spend is on course to grow 10.7 percent this year to a total of $1.08 trillion, a new report said on Wednesday.
This will be the strongest growth rate in six years and largest absolute rise on record if the post-Covid recovery of 2021 (+27.9 percent year-on-year) is disregarded.
The new study from WARC, the experts in marketing effectiveness, also represents a 0.2 percentage point upgrade on its last global forecast in August.
Surge to continue
Ad spend growth is also anticipated next year (+7.6 percent) and in 2026 (+7 percent), culminating in a global advertising market worth $1.24 trillion. Global ad investment has more than doubled over the last decade and has grown 2.8x faster than global economic output since 2014.
WARC’s latest global projections are based on data aggregated from 100 markets worldwide.
Online media leads
While the headline growth rate is mostly being driven by online media, a good year for TV has also made a notable contribution. Linear TV spend is expected to end the year 1.9 percent higher, at $153.6 billion, following two years of decline. TV has been boosted by political advertising – particularly in the US – during the fourth quarter and both the Paris Olympics and the Euro 2024 football tournament in the third. Linear TV now accounts for just 14.3 percent of global advertising spend, however, down from a peak of 41.3 percent in 2013.
Building upon a solid performance for legacy media, pure play internet, which encompasses advertising revenue among online-only businesses such as Alphabet, Amazon and Meta, is poised to grow by 14.1 percent to a total of $741.4 billion – over two thirds (68.8 percent) of all ad spend.
Social media the largest sector
Social media is the largest individual sector within pure play internet – and the largest advertising medium of all by extension – with a total of $252.7 billion this year equivalent to 23.5 percent of the global ad market. Prospects for the social market have been revised upwards this year to +19.3 percent, owing mostly to stronger-than expected results for Facebook, Instagram and TikTok over the first nine months of the year.
James McDonald, director of data, intelligence and forecasting, WARC, and author of the research says: “Our latest forecast anticipates $104 billion in incremental advertising spend worldwide this year, the largest rise in history if the post-pandemic recovery year of 2021 were discounted.”
“Whether this boom will sustain remains unclear. However, as 2025 presents a sliding doors moment due to heightened regulatory pressures on Google and TikTok – together a quarter of the ad market outside of China. This, alongside an increasingly challenging geopolitical climate, may spell uncertain times ahead for the businesses that rely on advertising trade,” he added.
Google far ahead
One in five dollars (22.1 percent) spent on advertising outside of China is paid to Google for its search services. Further, at an expected $197.7 billion in 2024 (+13 percent year-on-year), Google alone accounts for 90.1 percent of all search advertising (excluding China). These commanding shares are similar in the US, leading the Department of Justice (DOJ) to rule last week that Google has an effective monopoly on the search market.
One potential suitor – Bing – still struggles with adoption and advertiser investment despite Microsoft’s $100 billion investment, accounting for just 5.9 percent of search spend outside of China. Bing’s ad revenues are expected to be up just 5.1 percent this year – compared to a rise of 11.9 percent for total search and 13 percent for Google – to a total of $12.9 billion.
Apple already makes $5.1 billion from search ads, mostly via its app store, per Omdia Advertising Intelligence estimates, and could create its own search engine given its financial and distribution resources. The device manufacturer may hesitate to proceed, however, due to the high costs associated with maintaining a search business aside a general strategic misalignment. A leftfield entrant – perhaps Elon Musk’s X on the lookout for new revenue streams after losing $5.9 billion in ad revenue since its 2022 takeover – may materialize.
Holidays are coming
Advertisers the world over are expected to spend $299.2 billion during the final quarter of the year, well over half of which will be spent during the holiday season. This represents a 10.2 percent rise from the previous year, up marginally (+0.2 percentage points) from our August forecast.
The fourth quarter is crucial for retailers, typically accounting for over 30 percent of annual ad spend within the sector, which represents the intense battle for consumer salience and share of wallet each year. Retailers will spend $45.6 billion on advertising during Q4 2024, up 5 percent compared to last year. TV is set to attract 15.9 percent of this spend, at $6.8 billion, with nearing a quarter (23.3 percent) of this – $1.6 billion – spent on ads delivered via connected TVs (CTV) so as to leverage the additional targeting capabilities these devices can afford advertisers.
Advertising on retail media platforms is also set to peak during the fourth quarter as brands vie to reach consumers close to the point of purchase. Globally, retail media spend is forecast to rise 16.4 percent in Q4 2024 to a total of $46.2 billion – a new high. Amazon alone is expected to net $16.9 billion from advertisers at this time, up 18 percent from the previous year.
The technology and electronics sector is expected to spend most in online retail media environments during the fourth quarter, with an anticipated total of $7.2 billion up 18.7 percent from last year. For context, this is over three times more than the sector spends on TV.
Overall, retail media ad spend is forecast to reach $154.8 billion this year, with a further rise of 14.8 percent expected next year and 13.5 percent in 2026, by when the market would be worth $201.6 billion.
