Total global ad spend is on course to hit $1.07 trillion this year, according to new data from marketing data business WARC, representing 10.5 percent year-on-year growth. This is an increase of 2.3 percentage points compared with WARC’s previous forecast last August, suggesting improved market conditions over the past year.
Strong growth is forecasted to continue into 2025 (7.2 percent) and 2026 (7.0 percent), with AI-powered media tools helping fuel growth. But the major beneficiaries of overall increases in ad spend continue to be the dominant tech giants. Google, Meta, and Amazon have collectively captured 70 percent of incremental ad spend over the past decade according to WARC, and will attract 43.6 percent of global ad spend this year. Excluding China, they will hoover up over half of global ad spend.
AI-powered growth
James McDonald, director of data, intelligence, and forecasting at WARC, and the report’s author, said that platforms and media companies which use first-party data for ad targeting – particularly those powered by AI – will be the main recipients of ad growth. Unsurprisingly, connected TV and retail media – both of which play into this trend – are expected to lead ad spend growth over the next three years.
Retail media is projected to be the fastest growing category measured by WARC, with ad spend expected to be up by 21.3 percent this year. CTV meanwhile is set to increase by 19.6 percent. But CTV is still working from a smaller base. Total CTV spend is predicted to hit $35.3 billion this year, compared to retail media’s $152.6 billion.
Social media, now the largest single category as measured by WARC, having overtaken search, is also projected to continue growing at pace. Social media ad spend is expected to grow by 14.2 percent this year, accounting for 22.6 percent of ad spend this year.
Social platforms have been among the quickest to adopt AI tools in their media sales processes, which has helped spur further rapid growth. WARC’s data states that half of all AI-enabled spend – defined as involving some form of recommendation algorithm, natural language processing or search optimisation – currently occurs in the social media sector.
Online pureplays dominate
There is still expected to be growth outside of the online platforms this year, but this will be relatively small, and many non-digital media channels are forecasted to fall in the next few years. Linear TV for example is expected to be up by 1.9 percent this year, its highest growth rate in a decade excluding the post-pandemic recovery in 2021. But pretty much all this growth is attributed to US political ad spending. Without this, the TV market would be up by just 0.1 percent, and linear TV ad spend is predicted to fall by over five percent next year.
The hard truth for traditional media businesses, according to WARC’s dataset, is that while there is massive growth available in the ad market, the online pureplays are the overwhelming beneficiaries. Almost nine in ten incremental ad dollars spent this year will be spent on online pureplay businesses, according to WARC, with half going to Google, Amazon, and Meta.
