News

Global Ad Spend May Hit $1trn In 2024

A recent report by WARC has shown that global advertising spending is expected to rise by 4.4% this year and 8.2% in 2024, a boost that will see the market top $1trn for the first time next year, with just five companies netting over half of the money.

According to the report, high-interest rates, spiralling inflation, military conflict, and natural disasters have impacted negatively over the preceding 12 months, but the latest earnings season shows that the advertising market has withstood this crisis and has now become impressive.

WARC offers advertising investment forecasts across all major media including for the first-time retail media and connected TV as well as 100 markets, 40 media owners, and 20 product sectors aimed at making sense of the evolution of industry trends.

According to the report, the five major tech firms to draw over half of this money are Alibaba, Alphabet (owner of Google and YouTube), Amazon, ByteDance (owner of TikTok and Douyin), and Meta (Facebook and Instagram).

“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”.

James McDonald, director of Data, Intelligence, and Forecasting at WARC explained: “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”.

With a US presidential election, the 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 spending rising to a total of $227.2bn next year – a fifth (21.8%) of total spending. Meta is set to take 64.4% of this projected spending.

WARC observes that the retail media will also be among the fastest-growing advertising channels over the forecast period; spending is set to rise 10.2% this year and 10.5% next year to $141.7bn – 13.6% of all spending. 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 budgets 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.

Read Also: Nigeria’s Telecom Contribution To GDP Hits 16 Per Cent

An analysis of spending 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 the 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.

The US is set to account for just under a third (31.3%) of global spending, 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 spending) but is anticipated to be the fastest-growing over the forecast period, with spending 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 spending in India is forecast to grow by double digits over the next 18 months to reach a total of $13.7bn in 2024.

Advertising spending 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.

The report presumes that Africa is facing a difficult year, with spending set to drop by 11.6%. However, growth should return in 2024 buoyed by a 6.1% rise in South Africa next year.

Related posts

Unilever, NSN Raise Concern over Iron Deficiency among Women and Children

Desmond Ekeh

Mass Scramble In APC For Top Positions In Federal Agencies, Parastatals

Desmond Ekeh

WATT Wins Contract To Upgrade Airtel Towers With 32MW Of Reliable Hybrid Solar Power

Precious Chinaza

Leave a Comment