Global ad spending is poised to hit $1 trillion—inside the latest forecasts

Santa arrived early with a flurry of 2024 advertising spend forecasts from various holding companies and analysts—WPP’s GroupM, for one, predicted that the global ad industry will surpass $1 trillion in total revenue for the first time this year and climb another 7.7% in 2025 to hit $1.1 trillion. Other estimates were more conservative. NextGen Marketing Summit Join us for a crash course on Gen Z, DTC marketing and the creator economy Register today Dentsu’s Dec. 3 global ad spend forecast estimated worldwide advertising revenue to grow by $48.9 billion (6.8%) year over year, to $772.4 billion in 2024. Dentsu predicted slower global ad revenue growth of 5.9% in 2025. IPG Mediabrands-owned intelligence firm Magna predicted in its report released Dec. 8 that global ad revenue would increase 10.3% to $933 billion in 2024, in line with its mid-year estimate. Magna predicted that worldwide ad revenue would be up 6.1% to $990 billion in 2025, enough to “flirt” with, but not reach, the $1 trillion mark next year. The U.S. remained the leading country for advertising spend. GroupM predicted in its report dated Dec. 9 that U.S. ad revenue will climb 9% in 2024—excluding U.S. political advertising—to $379 billion and another 7% in 2025. Consultancy Madison and Wall, led by industry analyst Brian Wieser, predicted in a report on Dec. 6 that U.S. ad revenue will increase by 9% in 2024 as well, which is also up from its previous annual forecast of 7.2%. Dentsu predicted the Americas would “remain the most dynamic region in 2025,” with a projection of 6.3% growth, consuming 47% of the worldwide ad revenue share. Among the latest 2024 U.S. ad revenue forecasts, Magna’s is the most optimistic, projecting 12.4% growth. It expects. just 4.9% U.S. ad revenue growth in 2025. Growth trends In 2024, growth continued to be driven by digital, retail media and TV, including linear and streaming, according to several of the reports, although some said remaining issues in streaming TV, including around measurement, could hold advertisers back from investing heavily there. Meanwhile, retail media might be on the verge of taking significant share from streaming in particular. Advertising growth continues to outpace overall global and economic growth, several reports highlighted. GroupM called out the International Monetary Fund’s recent world economic forecast, projecting GDP growth of 3.2% in both 2024 and 2025, and 3.3% in 2026. Kate Scott-Dawkins, global president of business intelligence at GroupM, said that it’s impressive that advertising continues to outpace worldwide economic growth, even as inflation has gone up. However, over the next four years, GroupM projects “just slightly better advertising growth than normal GDP growth,” or at least that the two growth figures will be more in line, she said during a recent call to discuss the agency’s report. The rise in AI products and the use of that technology to make advertising work more effectively and efficiently, Scott-Dawkins argued, may have a more positive effect on future ad growth. Among “the couple of things that could potentially impact it to the upside, we are expecting a rise in, [what] I’m calling AI endemic advertisers,” she said. “There’s likely to be an influx of advertising from existing players that are really pushing new AI products.” AI highlights GroupM’s report included a few highlights on how AI can impact advertising. The agency predicted that, with the introduction of tools such as GPT wrappers (designed to improve accessibility and usability of generative AI), AI interior design and AI code developers, it’s “relatively inexpensive to spin up a consumer-facing site or offer AI-powered automation tools to enterprise companies, with costs increasing along with query and compute requirements.” These companies will look to consolidate market share and grow categories, and “we expect many will rely heavily on marketing and advertising” to do that, according to GroupM’s report. Within search, GroupM said there have been advancements in AI that could be a boon to advertising, although there are no “clear revenue impacts as of yet—at the time of writing, Google’s integration of ads within AI Overview has been part of an experimental phase and ChatGPT search remains ad free. But the expense of developing cutting edge AI products and services means that monetization via advertising is likely to be a key part of future offerings,” the agency said in the report. More from Ad Age: 7 AI tools agencies are embracing What are the possible headwinds? Those predicting more tepid growth in 2025 point to possible geopolitical factors that could negatively impact growth, especially in the U.S. Madison and Wall’s Wieser lowered his forecast for 2025 U.S. ad revenue to 4.5% from a previous 5.3% projection, due to President-elect Donald Trump’s proposed policies including new tariffs on imported goods. “Although some observers (and, at this time, equity markets) may be willfully optimistic that tax cuts and other policies will be positive for the economy, implicitly anticipating that business ‘continues as usual’ over the next four years, we are inclined to believe that policies more likely-than-not to take effect are net negative for the US advertising market,” he wrote in the report. Wieser also argued that lower inflation, driven by tax cuts and lower interest rates that Trump has promised, could negatively impact advertising. “If high inflation results in greater friction in the economy or otherwise contributes to a reduction in economic activity (i.e. stagflation) then it’s possible that inflation will lead to less economic growth, and all else held equal, less advertising activity,” he wrote. Recent news: Ad employment fell slightly in November Digital continues double-digit growth Digital advertising’s double-digit growth is projected to continue in 2024 and then cool off a bit in 2025, according to some estimates. Wieser wrote that 2024’s performance shouldn’t go unnoticed. “We have to first consider how extraordinary it is that digital platforms have been able to sustain double-digit rates of growth,” he said in the report. Madison and Wall predicted U.S. digital advertising to spike 14.3% in 2024 but start to taper off in 2025, projecting 8.4% growth. Digging deeper, Wieser’s firm predicted ad sales on social media platforms will increase only 5.4% in 2025, following projected growth of 16.7% in 2024. Dentsu predicted in its report that worldwide digital ad spend is expected to increase by 9.2% to capture 62.7% of the total advertising market in 2025. The holding company included a chart (below) with estimates of where chief marketing officers are planning to invest marketing dollars over the next 12 months. Among the findings: 45% of 1,900 global marketing leaders surveyed said that they plan to increase investment in short-form content such as TikTok or Instagram Reels, 43% plan to increase spend on social commerce, 42% plan to increase investment on influencer marketing and 41% plan to boost spend on retail media. GroupM forecast global digital advertising to grow 12.4% in 2024 and 10% in 2025. The media agency predicted digital would capture 72.9% of total worldwide advertising in 2025 and 76.8% in 2029. GroupM also reported that the largest category of digital revenue, including social media and online video platforms such as TikTok and and most of YouTube, is predicted to grow 12.9% in 2024. Magna projected advertising sales of digital players including search, retail, social and short-form digital video to increase by 13% to reach $659 billion in 2024, driven by social media (up 18%), search and commerce (up 12%) and short-form video (up 12%). The IPG firm also wrote that the “big three” digital media owners (Google, Meta and Amazon) outperformed market growth in 2024, with ad revenue growing by 11%, 22% and 21%, respectively, for the first nine months of 2024. Retail media growth Despite ongoing issues related to measurement and transparency, advertisers continued to invest heavily in retail media networks. In most reports, retail media is included in the digital advertising category, but breaking that out a bit further, it’s showing very strong performance. Dentsu reported retail media “is the fastest growing digital channel” worldwide and projected it to spike by 21.9% in 2025. “As advertisers value retailers’ unrivaled access to consumer data, they look to strengthen relationships with these platforms, and increasingly turn toward off-site advertising, especially on connected TV,” the holding company wrote in its report. GroupM predicted that global retail media revenue will reach $176.9 billion in 2025, surpassing total TV revenue (including streaming) for the first time, representing 15.9% of total advertising spend worldwide. The agency predicted that retail media will increase 18.2% in 2024 and is expected to add 9.1% a year on a compound basis through 2029. TV remained strong According to several estimates, TV advertising, including linear and streaming, remained strong in 2024—thanks, in particular, to worldwide elections in countries including the U.S. and Mexico and the 2024 Summer Olympics. Cross-platform TV is estimated to have grown 5% to $163 billion, per Magna’s report, with non-linear ad sales up by 18% thanks to ad-supported streaming. “TV benefited the most from the cyclical drivers of 2024, with $6 billion of incremental ad revenues from political advertising for local television in the U.S., and $1 billion around the Olympic games for national TV,” Magna wrote in its report. Without those cyclical drivers, the firm projected that global TV advertising would be flat in 2024. Madison and Wall’s Wieser predicted national TV to increase around 0.3% in 2024, which he wrote was still “not so bad.” The growth was “aided by Olympics to be sure, but helped further by the overall advertising industry’s expected 9% ex-political gain,” he said in the report. “As share shifts away from television by the medium’s largest marketers continue (with limited offsets from emerging or smaller brands), negative growth trends will follow as industry-wide advertising growth moderates,” Wieser said in the report, predicting a 6.1% decline in national TV spend in 2025. Dentsu projected that the global TV marketplace returned to growth in 2024 (a 1.6% increase) following two years of declining ad spend. Without events such as the Olympics in 2025, spend in this area is projected to decline 2.5% in 2025, per the holding company’s report. Dentsu predicted streaming to “continue boasting double-digit ad spend growth,” with an estimated 18.4% rise in 2025 “as platforms like Netflix and Prime Video expand their ad offerings to attract more viewers.” GroupM, meanwhile, projected 19.3% growth in global streaming TV in 2025, and said this space “will still only represent 37.5% of total TV revenue by 2029.” Dentsu’s survey of global CMOs found there are still issues facing the streaming TV landscape that could hurt investment. Namely, the holding company said in its report that “the fragmentation of the video landscape is still an issue in terms of measurement and planning.” A chart from Dentsu on the key challenges CMOs face when investing in streaming TV shows its findings: 48% surveyed said they find it difficult to understand if these streamers will deliver as effectively as broadcast TV; 43% responded they’re not sure how to measure new video marketplace opportunities; 42% said there is not enough education or knowledge available on these investments; 37% responded they’re not sure which channels to invest in; and 34% said it’s hard to understand the value of the new video marketplace. “Streaming companies will have to double down on their efforts to demonstrate their impact in 2025 if they are to continue capturing impressions from broadcast television,” Dentsu wrote in its report. Become an All Access subscriber Get access to exclusive resources including Leading National Advertisers, World’s Largest Advertisers, Agency Report, Agency Review Tracker and TV Pricing Report. Click here

Global ad spending is poised to hit $1 trillion—inside the latest forecasts

Featured Stories