Global ad spend to top $1 trn this year: WARC

A new study from WARC has found that global advertising spend is on course to grow 10.5% this year to a total of $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 $1.23 trn.

The new projections show that ‘pureplay’ (i.e. online only) internet companies are set to record a 14% 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,

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 spend 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 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.”

The key findings outlined in the report are -

Global ad spend is forecast to rise 10.5% this year to a total of $1.07trn, and then 7.2% in 2025 and 7.0% in 2026; social, retail media and CTV to lead growth.
At $241.8bn in 2024, social media is the largest single advertising channel measured in WARC’s study, having overtaken search (excl. retail media) for the first time last year. It accounts for 22.6% of all global ad spend this year and is forecast to rise to a share of 23.6% by the end of 2026.

The report further says that the main social platforms have reported a fillip from new, AI-enabled services during the first half of 2024, a trend that is set to underpin the advertising industry at large over the coming years. Over half of all AI-enabled spend – defined as involving some form of recommendation algorithm, natural language processing or search optimisation – today occurs in the social media sector.

Search advertising (excluding retail media) accounts for 21.8% of global advertising spend, at a forecast total of $223.8bn this year. Its share has consistently grown since WARC began monitoring the sector in 2013, though it is set to plateau in 2026 as more purchase journeys begin in retail media environments and social commerce begins to realise its potential outside of Asia. Another potential headwind may be the rise of AI-driven search, and uncertainty around what the ad experience will look like for consumers more familiar with text-based search experiences.

Retail media is expected to account for 14.3% of global ad spend this year – a total of $152.6bn – which is double the share recorded in 2019 before the pandemic contributed to an exceptional growth spurt. Indeed, retail media is expected to be the fastest-growing channel over at least the next three years.

CTV is on course to be worth $35.3bn to advertisers this year, roughly a quarter of the size of the linear TV market. Growth is rapid; CTV spend is expected to rise 19.6% and is set to account for two-thirds of all growth in the video (linear + CTV) market this year, and all growth in 2025. By 2026, CTV is projected to account for almost a quarter (23.9%) of all video ad spend, at $46.3bn.

Legacy media, encompassing print publishing, broadcast radio, linear TV, cinema and out of home (OOH), now collectively account for a quarter (25.3%) of total advertising spend, having recorded a dip in share in each of the last 15 years.

Advertising spend on legacy media is expected to total $270.5bn this year, representing a 1.5% rise from 2023. Much of this growth can be attributed to US political spending; with this removed legacy media are, collectively, set to record a 0.5% decline in advertiser investment in 2024.

Linear TV spend is expected to grow by 1.9% this year, its best performance since 2014 if the post-Covid recovery year of 2021 (+12.7%) were excluded. The market is flat (+0.1%), however, excluding US political spend. Out of home (+7.2%) and cinema (+6.1%) will see some growth this year, though radio (-2.3%) is expected to record its third consecutive year of decline. Newsbrands (-3.3%) and magazine brands (-3.4%) are also due to see losses across print and online editions.

Advertising spend during the 2024 US presidential election is on course to top $15bn for the first time, with an expected total of $15.8bn up by over 40% on the previous cycle in 2020. Spend had been lagging the 2020 total earlier this year, but the surprise decision to change the Democratic candidate has led to an influx in spending in order to reposition the new ticket of Kamala Harris and Tim Walz. This shift is perhaps most pronounced online: political spending on social media is tracking 27.4% higher in Q3 2024 versus Q2 2024, with social spending by both main parties on course to reach $3.6bn this year.