Global adspend to top $1trn with AI in the driving seat

techn_11Global advertising revenue is set to grow 7.8% in 2024 to $989.8bn, and another 6.8% in 2025 to $1.1trillion, driven by digital growth, the recovery of key markets like China, and the accelerating adoption of retail media, CTV advertising, and AI.

So says the decidedly upbeat GroupM 2024 Global Midyear Forecast, which shows a big uptick from the agency’s prediction in December of 5.3% growth.

The increases in the total revenue for these years are largely due to revised forecasts for China, which it now estimates will record $199.4bn in 2024 compared to the $148.2bn in the last forecast.

These gains are primarily within digital pure play and out of home (OOH) advertising. GroupM has also revised estimates for the US, which it now expects to reach $365.9bn in ad revenue, up 5.8% over 2023’s $345.9bn (excluding the impact of political advertising in both years).

Aside from the US and China, GroupM’s forecast for 2024 has risen from 6.5% (in the December 2023 report) to 6.9% now.

Digital pure-play advertising (which excludes the digital extensions of TV, audio, print, and OOH) will make up 70.6% of total revenue in 2024, equalling $699bn. By 2029, digital will make up 74.9% of total advertising revenue, or $985.6bn, the report predicts.

When the digital extensions of traditional channels are included, the broader digital total would top 80% in 2025 and climb to 84.7% in 2029.

Within the digital channel, the largest five companies (Google, Meta, ByteDance, Amazon, and Alibaba) accounted for 77.7% of the total in 2023, up from 65.0% in 2016.

Retail media is expected to represent 15.1% of total ad revenue in 2024, up from just 1.5% a decade ago in 2014. The channel remains the fastest growing segment of digital, forecast to add 17.5% in 2024 and 13.5% in 2025.

GroupM now expects CTV ad revenue to total $38.3bn in 2024 (using new methodology) compared to the $33.2bn forecast in December 2023. It predicts 2024 CTV ad revenue will grow 20.1%, up from 16.1% in 2023, with a further 17.6% increase in 2025.

Machine-generated content could be 10% or more of total content-driven advertising by 2029, up from an estimated 2% in 2024.

In fact, after updating its model, GroupM estimates that 69.5% of revenue will be informed by AI in 2024 with the percentage reaching 94.1% by 2029, three years earlier than previously forecast.

The report concludes: “There are undoubtedly benefits to the globalisation and consolidation trend. For consumers, it may mean access to a wider array of goods and services. For advertisers, there are benefits in being able to apply learnings and best practices from one market to another within a single partner’s platform.

“The advertising industry will continue to adapt and innovate, steered by the outcomes of various governments and regulators around the world as they seek a balance between the benefits and costs of scale.

“There’s no escaping the fact that the marketing ecosystem — the entire world economy for that matter — can be skewed by two major players, China and the US. From social media and retail platforms to media companies and advertising practices, they have the power to shape vast aspects of world culture. Marketing moves by companies in these markets, as well as political decisions by their governments and regulatory bodies, have the potential to upend forecasts and alter even the most sound projections.

“Luckily for all of us, interconnected systems such as mycelial networks and coral reefs tend to be very adept at recovering from multitudinous small shocks. Innovation, the exchange of ideas, and a shared goal to make the advertising industry work better for everyone will help ensure a bright future.”

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