AI is ‘supporting rather than disrupting’ increasingly concentrated ad market growth — for now
AI is not replacing the advertising economy. Instead, it is increasingly shaping who captures its growth, how efficiently advertising dollars are deployed, how campaigns are transacted, and where consumers spend their time.
That is one takeaway from the latest global adspend forecast published by Madison & Wall, a strategic advisory and consulting firm that analyses the media industry.
Total global ad revenue grew an estimated 12.9% in Q2 this year, with continued growth of 9.8% (not including US political advertising) predicted for Q3.
Madison & Wall now forecasts the global ad market will grow 11% to surpass $1.3tn this year, which the firm describes as an “unusually rapid pace” after similar near-record growth notched last year.
According to its analysis, AI is powering much of the growth.
“AI is reducing creative, production and campaign-management costs, allowing a greater share of marketing budgets to flow toward working media,” the report reads. Likewise, AI has led to the creation of new businesses, many of which are advertising aggressively to court consumers.
These effects, the report reasons, are “supporting rather than disrupting advertising growth”, particularly for social (+17.3%), commerce (+14.5%) and search (+12.4%) channels, which are all forecast to grow double digits this year.
Those channels are benefiting from continued adoption of performance advertising, thanks to their scale and proprietary data, the report notes, with growth driven by automated planning and creative.
“The continued shift toward these convenient, measurable, ‘do it for me’ environments is helping search, social and commerce capture a growing share of total budgets and further concentrating growth among the platforms best positioned to provide them.”
These include, primarily, Alphabet, Amazon and Meta, which collectively represent 60% of the ad market in North America, 59% in EMEA, 56% in Latin America, and 53% in APAC (excluding China).
Meta’s Advantage+ and Google’s Performance Max platforms are expected to earn a combined $60bn in the US market alone this year, with that figure anticipated to more than double to $158bn by 2030. At that point, Madison & Wall predicts, those two services alone would represent more than a quarter (27%) of the entire US ad market.
Excluding the “Big Three” from the global ad growth picture still shows a universally growing global ad market, albeit at a substantially slower pace. For example, while full-year growth rates in EMEA are forecast to exceed 10%, the territory grew just 4.6% year-on-year in H1 2026 when excluding revenue from Alphabet, Amazon and Meta.
The slower growth rate, apart from the biggest ad sellers, is partially because other more ‘traditional’ media channels are forecast to post only modest or no growth. Madison & Wall predicts OOH will rise 5.7% year-on-year globally to lead the way, followed by TV (+1.3%), direct mail (+0.3%), audio (flat) and a decline in publishing (-2.1%).
Boom now, slowdown later
Madison & Wall warns that the same conditions supporting the ad market’s current boom, as consolidated as it is, “may also contribute to the conditions that eventually slow it down.” The firm is predicting global adspend growth will “moderate” in the coming quarters, slowing to 7% in 2027 and eventually 5% in 2029 due to a combination of difficult year-on-year comparisons and an expectation that “broader economic pressures begin to bite.”
As hyperscalers compete with governments and borrowers for investor capital, they reason, borrowing costs are rising, tightening financial conditions and affecting the broader economy.
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Global bond markets have become increasingly unstable this summer. A combination of large government debt and increased bond sales by tech companies seeking to fund AI infrastructure development has driven down bond prices, causing a related spike in bond yields. This has come as the Trump administration has increased borrowing to pay for its war with Iran, which has led to growing energy inflation. Combined with the US tariff policy, price inflation remains a key global macroeconomic risk.
Strong short- and medium-term ad market growth is occurring despite those headwinds, primarily because consumer spending has remained strong in most major markets, particularly at the upper end of an increasingly “K-shaped” economy.
Madison & Wall CEO Brian Wieser tells The Media Leader he shares the “longer-term concerns” currently being expressed by bond markets and explained the global fiscal situation is contributing to “our moderating growth expectations for the ad market”, which he said comprise “a mix of possible scenarios including some very negative ones and others where stronger growth persists.”
Singling out the EMEA market, the report notes that “slower underlying economic growth”, in tandem with “greater regulatory complexity” and short-term pressures on energy costs related to the US-Israel war with Iran, will likely cause the EMEA ad market to grow at a slower rate than the overall global ad market. Such relative underperformance is expected to persist at least through the back half of this year.