- Global promoting spending will grow 4.4% in 2023 and one other 8.2% in 2024, which can push the overall to over $1 trillion in spending for the first time, according to WARC’s Global Ad Spend Outlook 2023/24. The growth can be led by social, retail media and connected TV.
- Five firms — Alibaba, Alphabet, Amazon, ByteDance and Meta — will attract 50.7% of worldwide spending in 2023 and 51.9% in 2024. Their ad revenues are expected to increase by 9.1% in 2023 and by 10.7% in 2024, while the remainder of the industry stays stagnant.
- Bolstered by the upcoming presidential election and attention-grabbing sporting events reminiscent of the Olympics, the U.S. will account for almost a 3rd of the overall ad spend, rising 2.2% to $303.6 billion in 2023 and seven.6% to $326.7 billion in 2024.
Lingering macroeconomic concerns is not going to find a way to hold back ad spending in 2024 amid a confluence of attention-grabbing events, including the U.S. Presidential election, the Olympics and the UEFA Men’s Euros tournament, according to WARC. Combine that with improved trading conditions, particularly in China, and the industry could possibly be poised for some record-breaking years.
“High rates of interest, spiralling inflation, military conflict and natural disasters have made for a bitter cocktail over the preceding 12 months, but the newest earnings season shows that the ad market has withstood this turbulence and has now turned a corner,” said James McDonald, director of knowledge, intelligence and forecasting for WARC, in a release.
“With the establishment of retail media as an efficient promoting channel, the appearance of connected TV as the following evolution of conventional video consumption, and the continued growth of social media and search, we’re seeing once more the worth advertisers place in leveraging first-party data to goal the proper message to the proper person at the proper time,” McDonald continued.
WARC’s forecast suggests social media will account for $227.2 billion of ad spending in 2024, greater than a fifth (21.8%) of the overall spend. Meta, which owns Facebook, Instagram and Whatsapp and controls almost two-thirds of the social media market, can expect to see greater than $146 billion in ad revenue, followed by TikTok owner ByteDance, which can see slightly below $40 billion in ad revenue (equating to a 17.6% share).
Similarly, retail media will proceed to expand, with channel spending expected to rise 10.2% in 2023 and 10.5% in 2024. In 2024, retail media will account for 13.6% of all ad spending for a forecasted total of $141.7 billion. Unsurprisingly, Amazon is anticipated to dominate the channel, accounting for 37.2% of all retail media spending (about $52.7 billion). Meanwhile, Alibaba will lose ground in an increasingly competitive Chinese market, which can include Pindoudou (14.4% of worldwide retail media spend in 2024), JD.com (9.9%) and Meitaun (3.7%).
Connected TV (CTV) is anticipated to grow 11.4% in 2023 and 12.1% in 2024, reaching a complete of $33 billion. While that is barely 3.2% of all spending, it can account for 16.2% of combined CTV and linear TV spending. The data suggests media owners of each linear and connected TV can be competing with one another for existing TV budgets, relatively than taking share from other channels. As a result, linear TV spending will decline 5.4% in 2023. However, political and sporting events should reinvigorate the category to grow 3.5% in 2024. Regardless, linear TV remains to be the world’s third-largest promoting medium, accounting for 15.6% of worldwide promoting spending in 2024.
Search will remain the second-largest promoting channel increasing to $229.2 billion in 2024, equivalent to 22% of all promoting spending. Despite indications that it’s losing ground, Google will command 83.1% of the search market in 2024, equal to $190.5 billion in ad revenue. China’s Baidyu will see its share drop to 6.5%, while Bing’s share of the search market will hold at about 6%.
Among the categories, financial services can be the fastest growing sector, increasing by 11.5%, followed by technology and electronics (+11.3%) and pharma and healthcare (+11%). CPG categories — including food, household & domestic, nicotine and soft drinks — will even see growth into 2024, with a greater focus on retail media platforms.
Read the complete article here