Never say that uncertainty stops ad spending.
So far this year, it has held strong despite regional conflicts, sticky inflation, high borrowing costs and the possibility that many markets could slip into recession.
And it looks set to stay strong for the foreseeable future. In fact, spending experts have even revised their projections to account for additional interventions.
GroupM now expects global ad spending to grow 7.8% to $989.8 billion in 2024, excluding political advertising – a significant growth from its original 5.3% growth forecast. The company predicts it will break $1 trillion by 2025.
Most of this growth will come from the US and China, which account for nearly 60% (57.1%) of global advertising dollars. Advertising worth $44.5 billion this year from those two countries alone.
Kate Scott-Dawkins, head of business intelligence at GroupM, noted in her advertising forecast for this year and next year that most growth is concentrated among the largest publishers and platforms globally. In other words, the industry is in and out of its most relaxed era.
„Overall concentration in the top 25 rose again last year to over 72%,” Scott-Dawkins said. “If we take the top five ad vendors in the last seven years, by our count [Google, Meta, Bytedance, Amazon and Alibaba], their compound annual growth rate is 23%. All parts of the market, if we strip out that revenue, grew just 2.1% – slower than global GDP over the same period.
The forecast tracks created by Brian Weiser, a prominent advertising industry analyst who wrote the Madison and Wall newsletter earlier this month. He updated his own ad spending outlook — for the fourth time in four quarters — to 6.3% growth in U.S. ad spending this year, up from the 4.3% increase he came in with in September. That excludes political advertising costs.
GroupM’s Scott-Dawkins upgraded its growth forecasts for the US market to 5.8% in 2024 and 4.9% in 2025. A good part of the growth was retail media, which rose 22% to $48 billion.
That’s based on „very strong opening figures this year from Amazon to Walmart” and other major retail media players, Scott-Dawkins said.
The same big-picture growth story applies to Tenzu. A month ago, the agency holding company said global ad spending would rise 5.0% to $754.4 billion this year, up from a forecast of 4.6% by the end of 2023. This revised forecast does not outpace Dentsu’s ad spending last year. It already beat expectations with annual growth of 3.3%, but it beat the growth rate of the global economy by 1.8%.
That’s the thing about advertising spend. It is driven by corporations, not consumers, so it is not as tightly linked to economic and political maneuvers as it once was. The post-pandemic years have made this clear. They’ve shown that uncertainty is something that ad dollars adapt to rather than retreat from.
Consider the globalization of marketing spend and better measurement tools. This has reduced advertising spending along with traditional economic indicators such as GDP. Of course, GDP is still a helpful proxy for understanding potential advertising trends, but it’s just one of many factors to consider now.
„You can have a negative economy and at the same time you can have positive publicity,” Weiser said. „If you’re using the relationship between GDP as a proxy for economic activity and advertising [to forecast]Don’t think these things will stand any longer.
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