A resurgent social media market – a fifth of all spend – will drive growth into 2024, though emerging channels such as retail media and connected TV (CTV) – measured for the first time in this study – are also poised to see increased investment from brands over the coming 18 months.
James McDonald, Director of Data, Intelligence and Forecasting, WARC, and author of the research says: “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. Our new measurements show how the fortunes of just five companies have a major bearing on the prospects of the industry at large, and that these companies are on course to record oversized gains in the coming months.
“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”.
Key findings outlined in WARC’s Global Ad Spend Outlook 2023/24: Withstanding Turbulence are:
- Global ad spend is forecast to rise 4.4% this year to a total of $963.5bn and then 8.2% in 2024 to a total of $1.04trn; social, retail media and CTV are set to lead growth
Market growth in 2024 will be boosted by the US Presidential campaign (political spend is estimated to reach $15.5bn globally next year), sporting events such as the Olympics and UEFA Men’s Euros, and improved trading conditions – particularly in China.
The forecasts suggest Social Media will be the fastest-growing medium, with spend rising to a total of $227.2bn next year – a fifth (21.8%) of total spend. Meta – owner of Instagram, Facebook and Whatsapp – controls almost two-thirds (64.4%) of the social media market, with expected ad revenue of $146.3bn next year. TikTok owner Bytedance then follows, though estimated ad revenue of $39.9bn in 2024 equates to a 17.6% share, some 3.5 times smaller than Meta.
Retail Media will also be among the fastest-growing advertising channels over the forecast period; here spend is set to rise 10.2% this year and 10.5% next year to a total of $141.7bn – 13.6% of all spend. Within this, Amazon is the dominant player with an expected share of 37.2% of all retail media spend equating to $52.7bn next year. While Amazon grows its share, Alibaba, the Chinese incumbent, is losing ground to Pindoudou (14.4% of global retail media spend next year), JD.com (9.9%) and Meitaun (3.7%) in an increasingly competitive Chinese market.
Connected TV (CTV) is also projected to grow well this year (+11.4%) and next year (+12.1%), reaching a total of $33.0bn – only 3.2% of all spend but 16.2% of premium video spend (CTV and linear TV combined). CTV media owners are mostly competing for existing TV budgets rather than winning share of spend from digital channels like social, or accessing new budgets such as retail media. It only took retail media 10 years to grow tenfold, and in the same time the size of the CTV ad market has only grown three-fold, according to WARC Media’s latest Global Ad Trends report.
Increased spend on CTV will not be enough to offset declining spend on Linear TV (-5.4%) this year, though political and sporting events are set to boost linear TV spend by 3.5% in 2024. Linear TV is still the world’s third-largest advertising medium, with an expected share of 15.6% equating to advertiser spend of $163.0bn in 2024.
Elsewhere, Search is on course to grow to a total of $229.2bn in 2024, equivalent to 22.0% of all advertising spend at that time. Google will remain the dominant player with an 83.1% share of the search market in 2024, up from 82.6% in 2023 and equal to $190.5bn in ad revenue. China’s Baidu will see its ad revenue rise modestly but its share dip to 6.5% next year, while Bing’s share of the search market is set to hold at 6% despite revenue growing to $13.6bn next year.
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%), including a 1.6% dip for Newsbrands and 2.5% fall for Magazine Brands.