The headline figure in a new report by the World Advertising Research Center (Warc) is eye-catching. For the first time, annual global advertising spending will surpass $1 trillion (€900 million) in 2024. It will reach $1.07 trillion, the organization predicted this week, after raising its forecast growth rate for 2024 to 10 .5 percent, while an additional increase of 7.2 percent is expected next year.
This is great news for the three companies that dominate the advertising market globally: Meta, Amazon and Google and Alphabet, owner of YouTube. This “trifecta” – the leaders in social media, retail media and search respectively – is expected to attract 43.6% of all ad spend, with their share growing to over 46% by 2026.
Increased adoption of artificial intelligence (AI) tools is contributing to fast times for retail media – or advertising at or near the point of purchase – as well as double-digit growth for social media and search advertising.
More than half of the incremental ad spend this year went to Alphabet, Amazon and Meta, according to Warc, while over the past decade those three companies have attracted about 70% of the incremental money spent on advertising. This represents an enormous accumulation of financial power in a relatively short period of time.
“Legacy media” – which includes print, broadcast, linear TV, cinema and out-of-home advertising – now collectively hold on to a quarter (25.3 percent) of total ad spend, having recorded a decline in share in each of the last 15 years. However, doom and gloom are not the same, with a surge in US political spending this year likely to lead to a 1.5 percent rise in legacy media advertising.
Indeed, without Kamala Harris vs. Donald Trump, legacy media would have seen a 0.5 percent drop in ad spending, Work said.
Running for president isn’t cheap. US political ad spending is projected to reach a whopping $15.8 billion this year, of which $3.6 billion, or more than a fifth, will be spent on social platforms. This is the highest total ad spending for a US presidential election and marks an increase of more than 40 percent over the 2020 election.
When the race was still Joe Biden vs. Trump, however, spending lagged behind 2020. It wasn’t until the Democratic nominee changed that there was an influx of ad money. So Harris may not be cast yet, but she’s already proving to be good for business.