A new study from WARC, experts in marketing effectiveness, has found that global advertising spending is on course to grow 10.5% this year to $1.07trn—the best performance in six years if the post-COVID recovery of 2021 (+27.9% year-on-year) is disregarded. Ad spend growth is also anticipated next year (+7.2%) and in 2026 (+7.0%), culminating in a global ad market worth $1.23trn. Global ad investment has more than doubled over the last decade and has grown 2.8x faster than global economic output since 2014.
Just three companies – Meta, Amazon, and Alphabet – account for more than 70% of this incremental spend. This trifecta is expected to attract 43.6% of all advertising spending this year, rising to a share of over 46% by 2026. WARC’s latest global projections are based on data aggregated from 100 markets. New for this edition, WARC is now leveraging an advanced neural network machine learning model that projects advertising investment patterns based on over two million data points spanning macroeconomic data, media owner revenue, marketing expenses from the world’s largest advertisers, media consumption trends, and media cost inflation. It is believed to be one of the most comprehensive advertising market models available to the industry today.
The new projections show that ‘pureplay’ (i.e., online-only) internet companies are set to record a 14.0% rise in advertising revenue this year, reaching a total of $735.7bn. In total, almost nine in every ten (88.5%) incremental dollars spent on advertising this year will go to online-only businesses, with half (52.9%) being paid to Alphabet, Amazon, and Meta. Pureplay platforms are set to account for over 70% of all advertising spend worldwide next year.
Retail media (+21.3%), social media (+14.2%), and search (+12.1%) are set to lead digital growth in 2024, with these three sectors alone accounting for over 85% of online spending and almost three in every five (58.7%) incremental dollars spent on advertising worldwide this year. All are benefiting from the increased adoption of AI-driven ad services and the growing appreciation of first-party data.
James McDonald, Director of Data, Intelligence and Forecasting, WARC, and author of the research says: “The global ad market has doubled in size over the last decade, with advertising investment growing almost three times faster than economic output since 2014. Three companies – Alphabet, Amazon and Meta – have been the largest beneficiaries from this period of expansion, attracting seven in ten incremental ad dollars over the last ten years. With retail media expected to lead ad spend growth over the coming years, and with new, diverse players emerging in ad selling – from Uber to Chase – we are once again seeing the value of first party data in targeting the right person with the right message at the right time. Such data, combined with new AI enhancements, will constitute the fabric of the advertising industry for the next decade and beyond.”
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