Dive card:
- Global advertising spending is expected to increase 10.5% this year to a total of $1.07 trillion, according to WARC’s latest forecast. The updated forecast represents a 2.3 percentage point increase over the company’s last forecast and reflects the use of artificial intelligence (AI)-enhanced media tools.
- Spending in North America will grow 8.6% to $348 billion, and Europe will increase 5% to $165 billion. Latin America will increase by 6.2% to $32.1 billion, and the Middle East will grow by 4.2% to $12.6 billion. Asia Pacific will remain the world’s second largest market at $272 billion with a growth rate of 2%.
- Meta, Amazon and Alphabet will attract nearly 44% of all ad spending this year, and the companies’ share is expected to grow to more than 46% over the next three years.
Dive Insight:
With a US presidential election and the Summer Olympics this year, it should come as no surprise that 2024 will be a record year for advertising spending. But WARC’s outlook for the next two years is equally bright, with spending expected to grow 7.2% in 2025 and 7% in 2026, culminating in a $1.23 trillion global ad market. According to WARC, global advertising investment has more than doubled over the past decade and has grown 2.8 times faster than economic output since 2014.
Additionally, Meta, Amazon and Alphabet account for more than 70% of this incremental spend, showing how dominant digital channels have become. Social media accounts for nearly $242 billion in spending this year and is the largest single advertising channel. Social will account for 22.6% of all global ad spend in 2024, and it’s expected to grow by a full percentage point by 2026.
In social, Meta has nearly 63% of the market, although its share is falling, particularly to TikTok owner ByteDance, which now pulls a fifth of all social ad spend (up from just 9% five years ago). Social media is benefiting from the adoption of AI across the industry, with more than half of AI-enabled spending, defined as involving some form of recommendation algorithm, natural language processing or search optimization, occurring in the social media sector.
Search, excluding retail media, accounts for nearly 22% of advertising spending, totaling nearly $224 billion. Google accounts for more than 84% of the global search market (and over 90% when China is excluded). Such dominance may help explain why Google was recently found in violation of US antitrust laws.
However, search spending is expected to plateau in the coming years as retail media gains more traction. Retail media is expected to account for just slightly more than 14% of total spending in 2024 ($153 billion) and the channel is expected to see the fastest growth over the next three years. By 2024, Amazon dominates the channel with expectations of nearly $56 billion in ad spending, representing more than a third of all retail media spending.
With the introduction of more ad-supported options, connected TV is also growing rapidly. CTV is on track to be worth $35 billion to advertisers this year. Furthermore, channel growth will account for two-thirds of all growth in the video market (linear and CTV) this year, and all growth through 2025.
Legacy media (print, broadcast radio, linear TV, cinema and out-of-home) now account for only a quarter of total advertising spending, about $271 billion this year. The figure represents a 1.5% increase over 2023 and is largely attributable to US political spending.
In other categories, retail, the largest category monitored by WARC, is expected to decline by 2.5% in global spending, while technology and electronics is expected to grow by more than 13%. Other strong growth categories include alcoholic beverages (12%), apparel and accessories (11%) and business and industrial (18%).
Geographically, North America will be the fastest growing region, led by the US presidential election, with ad spending rising 8.6% to a total of $347.5 billion. Latin America is expected to grow 6% to $32 billion based on Brazil’s currency growth and significant investment in online advertising. China’s expected growth of 6.4% and India’s growth of almost 12% will offset falling yen prices to help Asia-Pacific maintain 2% growth for the year.
Advertising across Europe to grow 5% to $165 billion in 2024. Brand spending in the Middle East and Africa is on track to grow 4% to $12.6 billion this year, with mixed fortunes in Africa and uncertainty surrounding conflict in the Middle East dampening growth expectations.
WARC’s analysis is based on ad spend data from 100 markets worldwide and forecasts of ad investment patterns based on over two million data points.
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