The headline in a new report from the World Advertising Research Center (Warc) is eye-catching. For the first time, annual global spending on advertising will exceed $1 trillion (€900 million) in 2024. The organization this week forecast it to be $1.07 trillion, after raising its forecast growth rate for 2024 to 10.5 percent, while a further increase of 7.2 percent is expected next year.
This is great news for the three companies that dominate the advertising market worldwide: Meta, Amazon and Google, as well as YouTube owner Alphabet. This “trio” – the leaders in social media, retail media and search respectively – is expected to attract 43.6 percent of all advertising spend, and their share will rise to over 46 percent by 2026.
The increasing use of artificial intelligence (AI) tools is driving record times for retail media – or advertising at or near the point of sale – as well as double-digit growth for social media and search advertising.
More than half of the additional ad spend this year will be accounted for by Alphabet, Amazon and Meta, according to Warc, while these three companies have attracted about 70 percent of the additional ad spend over the past decade. This represents an enormous accumulation of financial power in a relatively short period of time.
“Traditional media” – which includes print, broadcast, linear TV, cinema and outdoor advertising – currently together hold a quarter (25.3 percent) of total advertising spending, after seeing their share decline over each of the past 15 years. But the doom and gloom is not everywhere: a rise in political spending in the US this year is likely to lead to 1.5 percent growth in advertising in traditional media.
Without the Kamala Harris vs. Donald Trump campaign, traditional media would actually see a 0.5 percent decline in advertising spending, Warc said.
Running for president isn’t cheap. Political advertising spending in the U.S. is expected to reach a whopping $15.8 billion this year, with $3.6 billion, or more than a fifth, of that being spent on social platforms. That’s the highest ad spend ever on a U.S. presidential election and represents an increase of more than 40 percent from the 2020 election.
However, spending lagged in 2020 when the contest was still Joe Biden versus Trump. It is only since the Democratic candidate changed that there has been an influx of advertising money. So Harris may not be elected yet, but she is already proving to be good for the economy.
