NEWS4 September 2023

Global ad spend set to rise across 2023 and 2024

Asia Pacific Europe Latin America Middle East and Africa News North America Trends UK

UK – Global advertising spend is expected to grow 4.4% this year and a further 8.2% in 2024, topping $1 trillion, according to a study from marketing effectiveness body Warc.

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The forecasts suggest social media will be the fastest-growing medium, with spend rising to $227.2bn next year – equating to 21.8% of total advertising spend.

Retail Media will see spend rise 10.2% in 2023 and 10.5% next year to a total of $141.7bn, while connected TV (CTV) is projected to grow 11.4% this year and 12.1% in 2024 to an overall $33bn.

Spending on linear television, in contrast to CTV, will decline 5.4% this year, but is set to rise 3.5% in 2024 and remains the third largest advertising medium at an estimated total of $163bn next year.

Search is on course to grow to a total of $229.2bn in 2024, equivalent to 22% of all advertising spend at that time, with Google having an 83.1% share of the search market in 2024, up from 82.6% in 2023.

Outdoor ( 7.3%), cinema ( 5.2%), and audio ( 3.3%) are also set to see advertiser spend increase next year, though losses are expected among publishing media (-1.9%).

Market growth in 2024 will be boosted by the US Presidential, the Olympics, Uefa Men’s Euros and improved trading conditions, particularly in China. 

The analysis combines data from Warc’s survey of media owners, industry bodies, advertising agencies and research organisations in 100 markets worldwide with advertising revenue data from 40 of the largest media owners.

The data shows that five companies – Alibaba, Alphabet, Amazon, Bytedance and Meta – will attract 50.7% of global spend this year, rising to 51.9% in 2024.

Advertising revenue among this group is expected to rise 9.1% this year and 10.7% next year, while advertising revenue among all other media owners combined will be flat in 2023.

Advertising spend across North America is forecast to rise 2% this year and 7.6% next year, in line with the US, while Europe was expecting a rise of 0.6% this year and 3.6% in 2024, with the UK falling 1% in 2023. 

The Middle East is expected to have spending growth of 10% in 2023 and 6.2% in 2024, while in south Asia, an 8.9% increase this year and 12.1% next year is anticipated.

Southeast Asia is forecast to grow 4.8% this year and 4.6% in 2024, but advertising spend in Africa is set to be down 11.6%, with growth returning in 2024, and Latin America rising 0.8% in 2023 and 5.2% in 2024.

James McDonald, director of data, intelligence and forecasting at Warc and author of the research, said: “High interest rates, spiralling inflation, military conflict and natural disasters have made for a bitter cocktail over the preceding 12 months, but the latest earnings season shows that the ad market has withstood this turbulence and has now turned a corner.

“With the establishment of retail media as an effective advertising channel, the advent of connected TV as the next evolution of conventional video consumption and the continued growth of social media and search, we are seeing once again the value advertisers place in leveraging first-party data to target the right message to the right person at the right time.”

@RESEARCH LIVE

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