Despite ongoing economic turbulence, the prospects for the global ad market look fairly positive going into next year, according to WPP Media’s latest This Year Next Year forecast, with the total ad market expected to grow by 7.1 percent in 2026 excluding US political advertising. In today’s report, WPP also upgraded its projection for 2025, with full year growth now expected to reach 8.8 percent, a significant improvement on the 7.7 percent growth which was predicted this time last year.
As noted by the report’s author Kate Scott-Dawkins, WPP Media’s global president of business intelligence, this is a deceleration from 2024, when the total ad market grew by 9.1 percent by WPP Media’s estimations. But the fact that this year now looks likely to have been better for the total ad market than was predicted last year, even with the shock of US president Donald Trump’s tariffs towards the beginning of the year, is a positive for the industry.
An AI investment boom
The report puts this stronger-than-expected performance down to two factors. The first is the diminished impact of the aforementioned tariffs. While they’ve certainly had an impact, they’ve not put as big a dent in the ad industry as they might have otherwise. Companies front-loading imports ahead of tariff implementation, inventory management strategies, corporate decisions to absorb the impact of tariffs in their margins, and the depreciation of the dollar have all partially offset the damage done (although some of this economic pain has just been moved further down the line — part of the reason next year’s forecast is lower than this year’s).
The second factor is the AI investment boom which, regardless of whether we’re in an AI bubble or not, has sparked economic activity in 2025. The report cites analysis from Harvard economist Jason Furman who suggests that without AI investment, US real GDP growth would have been just 0.1 percent in the first half of the year. But massive AI spending, alongside genuine productivity gains from AI, has helped keep the global economy ticking, in turn boosting ad spend.
But while in the near term AI is having a positive impact on the industry, the report touches on some of the potential longer-term consequences which are harder to predict. The implications for the labour market, and the knock-on effects for the ad industry, are particularly significant. The report posits, for example, that in a world where far fewer people actually have to work, advertising could act as a universal subsidy, with a wider range of products and services made free but supported by advertising.
Of course, these workers will still need some sort of income to actually spend on the products they’re advertised. And even in the near term, rising unemployment levels could spell trouble for the ad market by dragging down consumer spending. WPP Media says its projections beyond 2026 (where the report predicts a compound annual growth rate of 6.3 percent) are based on the assumption that policymakers in big markets take measures to address inequality and support displaced workers — something which is by no means guaranteed.
Critical questions for TV
Looking at the TV ad market specifically, it’s a bit of a mixed picture.
The report notes that TV advertising is demonstrating “remarkable stability in absolute terms,” with the TV ad market predicted to grow 0.6 percent this year and 2.1 percent next year. It’s no shock, however, to read that this growth isn’t evenly distributed. Linear TV is in a continued state of “managed decline,” according to WPP Media, while streaming continues to show strong growth for the time being. Streaming TV advertising is expected to grow 15.2 percent this year, and 15.1 percent next.
This streaming growth is currently mostly coming from new ad tier launches for streaming services as they enter or grow in new markets. The TV world will have to find a way to sustain growth once the market fully matures. And there will be a fierce battle to capture ad spend between the expanded range of players now competing for TV budgets. WPP Media says that sports will be the big battleground of the future, given its continued ability to pull big audiences.
Even with the strength of streaming, TV’s share of total ad spend is diminishing. Last year, TV advertising accounted for 15.8 percent of the total global ad market — next year its share will fall to 13.9 percent.
The report lists three critical questions for the future of the TV ad market: whether streaming can continue growing even as subscription fatigue intensifies, whether sports rights remain economically viable for traditional broadcasters, and whether TV ad sellers can successfully attract spend from the small and medium-sized advertisers who have helped deliver consistent ad growth for Google and Meta.
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