Global ad industry to grow 9.5% this year as revenue flows to tech giants
GroupM has again upwardly revised its global ad revenue forecast for 2024, now predicting a 9.5% increase in revenue to reach $1.04tn this year.
It is the first year in which global adspend is expected to surpass $1tn and GroupM now forecasts the ad market will further grow 7.7% to $1.1tn in 2025.
Growth continues to be led by “pure-play” digital advertising (defined primarily as search, retail media, social media and display), which will account for 72.9% of total revenue in 2025. When considering digital extensions of traditional media, such as streaming TV, digital newspapers or digital OOH (DOOH), 81.7% of all ad revenue next year will be on digital formats.
“We really have seen this wholesale shift from print, TV and radio to digital,” commented GroupM president of business intelligence and This Year Next Year author Kate Scott-Dawkins.
However, the report notes that the digital economy is “consolidating around a few massive platforms, each expanding into the others’ territories”. So while competition could be seen as having increased, “it’s mainly between the same handful of players who have the resources to scale and compete”.
Indeed, GroupM expects 41% of all global ad revenue — and 75% of non-China digital revenue — to be earned by just Google, Meta and Amazon next year.
When factoring in Chinese companies ByteDance and Alibaba, the Big Five digital advertising companies are expected to earn more than half of all ad revenue in 2024, the majority of which comes from small and medium-sized businesses spending on their AI-infused ad platforms.
As Scott-Dawkins noted, while this is part of a years-long trend, “competition in the age of AI does require significant resources and scale”, such as through capital expenditure on AI development and server infrastructure, that makes it increasingly challenging for non-Big Tech companies to compete for large slices of the ad revenue pie.
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UK outperforms Europe, driven by digital
The report found the UK market specifically will “experience significant growth in 2024”, increasing 8.3% from last year to reach $53.2bn (£39.7bn) in ad revenue.
This solidifies the UK’s position as Europe’s largest ad market and the third-largest ad market in the world (behind the US and China).
In fact, The UK is projected to outgrow Europe more generally. GroupM upgraded its UK growth forecast, now anticipating 7% growth in 2025, compared with more modest growth in the other two largest European ad markets of France (4.9%) and Germany (4.5%).
The upgrade comes as GroupM “now expect[s] a better recovery” in the UK, with key catalysts including “the dominance of digital pure-play advertising […] which is expected to account for a significant 81.4% share of total advertising revenue generated within the UK”.
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Retail media was singled out as a key contributor to growth in the UK. Next year, GroupM expects retail media to earn £4.7bn in revenue — more than total TV advertising. According to Scott-Dawkins, this is occurring in the UK “earlier than in other markets”, although retail media is trending larger than TV globally as well.
Scott-Dawkins added that audio is a “positive” in the UK (projected to grow by 3.8% in 2024 and 2.7% in 2025), and OOH is growing at a “healthy” 7.4% in 2024, finally surpassing pre-Covid-19 revenues. GroupM expects a further 6.4% increase in UK OOH revenue next year, driven primarily by continued growth in DOOH.
Retail media and streaming lead growth
In most markets, the two fastest-growing channels next year are likely to be retail media and streaming TV, according to Scott-Dawkins.
GroupM expects 19.3% growth in streaming TV ad revenues in 2025, with streaming’s share of total TV revenue expected to reach 27.4%. In the UK, streaming’s share of the TV market is expected to be even higher (30%), as with the US (35.8%).
Scott-Dawkins highlighted that 2024 was a big year for sport thanks to the Olympics and the Euros, and indicated that sport is likely to be a major “growth driver” for TV in future years. She noted that 40% of Disney’s content spend in 2024 has been in sports, suggesting that key TV companies are aware of its importance in creating increasingly rare mass-reach media moments and willing to spend big to attract reliable audiences.
“While we’ve said in the past that the Olympics does not provide an overall industry boost, I do think we’re starting to see — because of the importance of sport as one of the last places to reach everyone all at once — that might start to shift in the coming years,” she said.
One traditional channel that was emphasised as facing clear headwinds is publishing. Scott-Dawkins noted that in 2000, print accounted for more than 50% of total ad revenue. By next year, that figure is expected to drop to just 4.3%.
Linear TV has seen a similarly reduced ad market share from around a third of the ad market at the start of the century to just over 10% of the market today, although broadcasters are adapting to a streaming future.
What could impact growth in 2025?
Despite the overall positive growth picture painted by the forecast report, Scott-Dawkins noted there are a number of uncertainties facing global economies that pose potential downside risks next year.
Namely, she admitted a second Donald Trump administration in the US has caused unease over increased protectionism that could upend global trade markets.
“I don’t think anyone knows exactly what’s going to happen there,” she said, adding a significant change in US tariff policy “could have a number of impacts”, particularly for automobile and tech manufacturers.
Scott-Dawkins noted that trade is “increasingly happening within blocs rather than across blocs” — something that could cause downward pressure on some markets. However, she reaffirmed that she is currently “optimistic for continued growth in the US”.
Indeed, next year’s forecast could be upgraded if more positive indicators come to fruition.
The recovery of the Chinese market remains a significant variable. Scott-Dawkins said GroupM’s “base case is continued sluggish growth […] in terms of consumer behaviour” in China, but suggested that ad market growth could outstrip real GDP as more businesses begin moving offline business activities online.
Should sentiment improve in China, consumer packaged goods (CPG) and luxury brands may begin shifting adspend from Western markets to China to capitalise.
Further, Scott-Dawkins added that she expects a rise in “AI-endemic advertisers” over the next few years, as new tech startups and established Big Tech players will need to aggressively advertise their new AI products to remain relevant.
IPG Mediabrands’ Magna has also released its global adspend forecast.
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