The headline figure in a new report by the World Advertising Research Center (Warc) catches the eye. For the first time, annual global spending on advertising will top $1 trillion (€900 million) in 2024. It will come in at $1.07 trillion, the organisation predicted this week after upgrading its forecasted growth rate for 2024 to 10.5 per cent, while a further increase of 7.2 per cent is anticipated next year.
This is great news for the three companies that dominate the advertising market globally: Meta, Amazon and Google and YouTube-owner Alphabet. This “trifecta” – the leaders in social, retail media and search respectively – is expected to attract 43.6 per cent of all advertising spend, with their share rising to more than 46 per cent by 2026.
The increased adoption of artificial intelligence (AI) tools is contributing to bumper 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 additional spending on advertising this year is going to Alphabet, Amazon and Meta, according to Warc, while over the past decade those three companies attracted about 70 per cent of the additional money spent on advertising. This represents a huge accumulation of financial power in a relatively short stretch of time.
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“Legacy media” – which encompasses print publishing, broadcast radio, linear television, cinema and out-of-home advertising – is now collectively clinging on to a quarter (25.3 per cent) of total advertising spend, having recorded a dip in share in each of the last 15 years. The doom-and-gloom isn’t uniform, however, with a surge in US political spending this year likely to result in 1.5 per cent growth in legacy media advertising.
Indeed, without Kamala Harris vs Donald Trump, legacy media would see a 0.5 per cent decline in advertising spend, Warc said.
Running for president doesn’t come cheap. US political ad spend is predicted to reach a cool $15.8 billion this year, of which $3.6 billion, or more than a fifth, will be spent across social platforms. This is the highest ever total ad spend for a US presidential election and marks an increase of more than 40 per cent on the 2020 election.
When the contest was still Joe Biden vs Trump, however, spending had been lagging 2020. It is only since the switch in the Democratic candidate that there’s been an influx of ad money. So, Harris might not have been elected yet, but she’s already proving good for business.
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