WARC says that the new forecast represents a 0.2 percentage point (pp) upgrade on WARC's last global forecast in August. Ad spend growth is also anticipated next year (+7.6%) and in 2026 (+7.0%), culminating in a global advertising market worth USD$1.24-trillion. Global ad investment has more than doubled over the last decade and has grown 2.8 times faster than the global economic output since 2014. 

WARC's latest global projections are based on data aggregated from 100 markets worldwide. New for this edition, WARC says that it is leveraging a proprietary neural network which projects advertising investment patterns based on over two million data points, spanning macroeconomic data, media owner revenue, marketing expenses from the world's largest advertisers, media consumption trends and media cost inflation. It is believed to be one of the most comprehensive advertising market models available to the industry today.

According to the report, while the headline growth rate is mostly being driven by online media, a good year for TV has also made a notable contribution. Linear TV spend is expected to end the year 1.9% higher, at USD$153.6-billion, following two years of decline. TV has been boosted by political advertising — particularly in the US — during the fourth quarter and both the Paris Olympics and the Euro 2024 football tournament in the third. Linear TV now accounts for just 14.3% of global advertising spend, however, down from a peak of 41.3% in 2013.

WARC says that building upon a solid performance for legacy media, pure play internet, which encompasses advertising revenue among online-only businesses such as Alphabet, Amazon and Meta, is poised to grow by 14.1% to a total of USD$741.4-billion — over two-thirds (68.8%) of all ad spend.

Social media is the largest individual sector within pure play internet — and the largest advertising medium of all by extension — with a total of USD$252.7-billion this year equivalent to 23.5% of the global ad market. Prospects for the social market have been revised upwards this year to +19.3%, owing mostly to stronger-than expected results for Facebook, Instagram and TikTok over the first nine months of the year, shows the research. 

James McDonald, Director of Data, Intelligence and Forecasting, WARC and author of the research says, "Our latest forecast anticipates USD$104-billion in incremental advertising spend worldwide this year, the largest rise in history if the post-pandemic recovery year of 2021 were discounted. Whether this boom will sustain remains unclear, however, as 2025 presents a sliding doors moment due to heightened regulatory pressures on Google and TikTok — together a quarter of the ad market outside of China. This, alongside an increasingly challenging geopolitical climate, may spell uncertain times ahead for the businesses that rely on advertising trade."

McDonald adds, "By leveraging WARC's proprietary neural network, which delivers timely and precise insights based on over two million datapoints, practitioners can navigate these dynamic conditions and plan ahead for a rapidly evolving advertising landscape."

Key Themes Outlined in WARC's Global Ad Spend Outlook 2024 / 25 Q4 Update 

According to WARC, the key themes outlined in the Global Ad Spend Outlook 2024 / 25 Q4 update are:

Google's 90% Share of Search Market Is a Monopoly, DOJ Rules

One in five dollars (22.1%) spent on advertising outside of China is paid to Google for its search services. Further, at an expected USD$197.7-billion in 2024 (+13.0% year-on-year), Google alone accounts for 90.1% of all search advertising (excluding China). These commanding shares are similar in the US, leading the Department of Justice (DOJ) to rule last week that Google has an effective monopoly on the search market. 

The court believes that Google also uses its search dominance to inflate the cost per click (up by approximately 7.5% this year) and maintain superior targeting, effectively blocking competitors from offering viable alternatives.

Outcomes from the ruling range from Google ceasing payments to handset manufacturers and others for default preference — at a cost of approximately USD$30-billion per annum — to the selling off of its Chrome business to a third party. 

One potential suitor — Bing — still struggles with adoption and advertiser investment despite Microsoft's USD$100-billion investment, accounting for just 5.9% of search spend outside of China. Bing's ad revenues are expected to be up just 5.1% this year — compared to a rise of 11.9% for total search and 13.0% for Google — to a total of USD$12.9-billion.

Apple already makes USD$5.1-billion from search ads, mostly via its app store, per Omdia Advertising Intelligence estimates, and could create its own search engine given its financial and distribution resources. The device manufacturer may hesitate to proceed, however, due to the high costs associated with maintaining a search business aside a general strategic misalignment. A leftfield entrant — perhaps Elon Musk's X on the lookout for new revenue streams after losing USD$5.9-billion in ad revenue since its 2022 takeover — may materialise, but on the whole natural successors to Google remain unclear.

With the ongoing uncertainty around the practicalities of the DOJ ruling and the probability that Google will appeal it vigorously in the coming months, WARC is maintaining its growth forecast of +9.0% next year and +7.0% in 2026 for the company while the situation develops, leaving a potential USD$231-billion ad business and USD$32.9-billion of growth in the balance over the next two years.

Holidays are Coming 

Advertisers the world over are expected to spend USD$299.2-billion during the final quarter of the year, well over half of which will be spent during the holiday season. This represents a 10.2% rise from the previous year, up marginally (+0.2pp) from WARC's August forecast.

The fourth quarter is crucial for retailers, typically accounting for over 30% of annual ad spend within the sector which represents the intense battle for consumer salience and share of wallet each year. Retailers will spend USD$45.6-billion on advertising during Q4 2024, up 5.0% compared to last year. TV is set to attract 15.9% of this spend, at USD$6.8-billion, with nearing a quarter (23.3%) of this — USD$1.6-billion — spent on ads delivered via connected TVs (CTV) so as to leverage the additional targeting capabilities these devices can afford advertisers.

Advertising on retail media platforms is also set to peak during the fourth quarter as brands vie to reach consumers close to the point of purchase. Globally, retail media spend is forecast to rise 16.4% in Q4 2024 to a total of USD$46.2-billion — a new high. Amazon alone is expected to net USD$16.9-billion from advertisers at this time, up 18.0% from the previous year.

The technology and electronics sector is expected to spend most in online retail media environments during the fourth quarter, with an anticipated total of USD$7.2-billion up 18.7% from last year. For context, this is over three times more than the sector spends on TV. 

It's also a big time of year for fast-moving consumer goods (FMCG) brands, with alcoholic drinks (+13.5% to USD$3.9-billion), cosmetics (+13.8% to USD$5.2-billion), food (+19.4% to USD$5.4-billion) and soft drinks (+22.0% to USD$4.5-billion) sectors all increasing retail media spend and allocating an increasing share of their ad budgets to online retail platforms this year.

Overall, retail media ad spend is forecast to reach USD$154.8-billion this year, with a further rise of 14.8% expected next year and 13.5% in 2026, by when the market would be worth USD$201.6-billion.

Canada Calls Time on TikTok

This month, the Canadian government ordered TikTok Technology Canada, Inc. to wind up its Canadian operations under the Investment Canada Act, citing national security concerns. This move forces TikTok to halt sales operations in Canada but does not block Canadians' access to the app or its content creation capabilities. TikTok has vowed to challenge the order in court.

There are few signs that advertisers are reining in their TikTok budgets; WARC believes TikTok's ad billings grew by 27.1% to USD$17.8-billion over the first nine months of 2024, even as the prospect of tighter regulation comes into sharper focus. 

Globally, TikTok's audience is now almost at parity with Instagram, but users spend twice as long with TikTok. A ban is most likely to be to the benefit of Instagram, Snap and, to a lesser extent, YouTube thanks to its analogous Shorts format, mostly due to the migration of content creators. 

Brian Wieser of Madison & Wall estimates that some CD$500m annually will be up for grabs if TikTok were to exit Canada. This scenario has not yet been factored into WARC's forecasts pending the appeal process; indeed, WARC now expects TikTok to generate USD$24.6-billion in advertising revenue (excl. China) this year, a rise of 25.9% from 2023 but equivalent to just 9.1% of all social advertising spend.

WARC concludes that a complimentary executive summary by WARC's James McDonald, author of the report, is available to read here. WARC subscribers can read the article and access additional data here. 

For more information, visit www.warc.com. You can also follow WARC on Facebook, LinkedIn, X, or on Instagram. 

*Image courtesy of contributor