Global advertising to top $1 trillion in 2024, as big five attract most spending

Global advertising spend is set to grow 4.4% this year and 8.2% in 2024, a boost that will see the market top $1trn for the first time ever, according to a new study from WARC. 

The new analysis combines data from WARC’s proprietary survey of media owners, industry bodies, ad agencies and research organisations in 100 markets worldwide with advertising revenue data from 40 of the largest media owners. 

WARC members can access the full report and download the data here, while non-members can read the report here.

Why global advertising forecasts matter

“High interest rates, spiralling inflation, military conflict and natural disasters have made for a bitter cocktail over the preceding 12 months, but the latest earnings season shows that the ad market has withstood this turbulence and has now turned a corner,” says James McDonald, director of Data, Intelligence and Forecasting at WARC.

Tech’s big five close in on over half of total market in 2023

Five major tech firms – Alibaba, Alphabet (owner of Google and YouTube), Amazon, ByteDance (owner of TikTok and Douyin) and Meta (Facebook and Instagram) – will together take over half of global advertising spend this year. 

• With growth ahead of the market, these five companies are expected to see ad revenue rise 9.1% this year and 10.7% in 2024. 
• All other media owners combined will be flat this year. 
• These increases will yield a share of 51.9% of the market by next year.

“Our new measurements show how the fortunes of just five companies have a major bearing on the prospects of the industry at large, and that these companies are on course to record oversized gains in the coming months,” explains McDonald in the report.

Channel: Social media, retail media, and connected TV lead growth over the next two years

With a US presidential election, Olympics, and the UEFA men’s Euros all in 2024, major events are expected to spur growth. But certain channels are expected to lead: 

• Social media will be the fastest-growing medium, with spend rising to a total of $227.2bn next year – a fifth (21.8%) of total spend. Meta is set to take 64.4% of this.
• Retail media will also be among the fastest-growing advertising channels over the forecast period; spend is set to rise 10.2% this year and 10.5% next year to a total of $141.7bn – 13.6% of all spend. Amazon is expected to take 37.2%.
• Connected TV (CTV) is also projected to grow well this year (+11.4%) and next year (+12.1%), reaching a total of $33.0bn – only 3.2% of all spend but 16.2% of premium video spend (CTV and linear TV combined).

It’s important to place CTV growth in the context of globally declining linear TV spending (-5.4%) with CTV’s media owners competing for TV budgets rather than winning budget from newer channels like social or CTV. Despite this, linear TV remains the world’s third largest single medium with 15% of the market, or $163bn by 2024.

Category: Financial services, tech, pharma and health lead the growth

An analysis of spend by product sector shows that Financial Services (+11.5%) is on course to be the fastest-growing sector in 2024, followed by Technology & Electronics (+11.3%) and Pharma & Healthcare (+11.0%) – which is typically a TV stalwart but for which digital formats now attract over half of spend.

More muted growth is expected among the largest grouping – Retail – this year and next, proportional to the pressure consumers are facing in North America and Europe because of high inflation. 

Geography: Middle East and South Asia to be the biggest growers

• The US is set to account for just under a third (31.3%) of global spend, with a forecast rise of 2.2% this year and a further 7.6% in 2024 to reach $326.7bn. 
• The Middle East is among the smallest regions (just 0.7% of global spend) but is anticipated to be the fastest-growing over the forecast period, with spend up 10% in 2023 and 6.2% in 2024.
• South Asia is also growing rapidly (+8.9% this year, +12.1% next year), buoyed by a strong Indian market. Ad spend in India is forecast to grow by double digits over the next 18 months to reach a total of $13.7bn in 2024. 
• Advertising spend in Europe is set to rise just 0.6% this year, before the rate of growth increases to 3.6% in 2024 as economic headwinds ease. The UK – the largest single ad market in the region with a 4.6% share – is set to see a dip of 1% this year when measured in US dollars. 
• Africa is enduring a difficult year, with spend set to be down 11.6%. Growth should return in 2024, however, buoyed by a 6.1% rise in South Africa next year.

Read the full report – Global Ad Spend Outlook 2023/24: Withstanding Turbulence

A complimentary article by WARC’s James McDonald, author of the report, is available to read here. WARC subscribers can access the article and data here. A podcast featuring a summarisation of the results by James McDonald and Kate Scott-Dawkins, global president, Business Intelligence, GroupM, is available to listen to on The WARC Podcast from today.