Global advertising spend is on track to exceed $1 trillion for the first time this year, according to projections from marketing effectiveness company Warc. The company expects advertising spend to rise by 10.5% globally, which is a significant increase compared to its previous forecast. This growth is driven by various regions around the world, with North America, Asia-Pacific, Europe, Latin America, and the Middle East all expected to see increases in advertising spend.
In North America, advertising spend is projected to grow by 8.6% to reach $348 billion. Asia-Pacific is also expected to see growth, with a 2% increase to $272 billion. European advertising spend is forecasted to rise by 5% to $165 billion, while Latin America is set to increase by 6.2% to $32.1 billion. The Middle East is expected to see a 4.2% rise in advertising spend, reaching $12.6 billion.
The growth in advertising spend is not limited to this year alone. Warc predicts that advertising spend will continue to rise in the coming years, with a 7.2% increase in 2025 and a 7% increase in 2026. This upward trend is expected to culminate in a global advertising market worth $1.23 trillion.
One interesting trend highlighted by Warc is the dominance of three companies – Meta, Amazon, and Google parent company Alphabet – in the advertising space. These companies are projected to attract more than 70% of the incremental spend in advertising this year, with their share expected to grow to over 46% by 2026. Pureplay internet companies, which operate online-only platforms, are also set to see a significant rise in advertising revenue, reaching a total of $735.7 billion this year.
Retail media, social media, and search are expected to lead digital growth in 2024, with these sectors accounting for more than 85% of online spend. Pureplay platforms are projected to make up more than 70% of all advertising spend worldwide next year. This shift towards digital advertising is driven by the increasing importance of first-party data in targeting the right audience with the right message.
Warc’s projections are based on data aggregated from 100 markets, using a neural network machine learning model to anticipate advertising investment patterns. James McDonald, director of data, intelligence, and forecasting at Warc, emphasized the importance of first-party data and AI enhancements in shaping the future of the advertising industry. As new players emerge in the ad selling space, the value of data-driven targeting is becoming increasingly evident.
In conclusion, the global advertising market is experiencing significant growth, driven by digital platforms and the increasing importance of data-driven advertising strategies. With advertising spend expected to continue rising in the coming years, companies will need to adapt to the evolving landscape of the industry to stay competitive and reach their target audiences effectively.