Suddenly ad economy forecasts get rosier, but the biggest companies will benefit the most

Don’t ever say that uncertainty stops ad spending.

So far this year, it’s held up strong despite regional conflicts, sticky inflation, high borrowing costs and the possibility of several markets slipping into a recession.

And it looks set to keep going strong for the foreseeable future. In fact, spending experts have even revised their forecasts to account for the additional upside.

GroupM now expects global ad spending to grow 7.8% in 2024 to $989.8 billion, excluding political advertising — a notable bump from its original 5.3% growth forecast. And the company predicts that 2025 will usher in the first year to ever break $1 trillion.

Most of this growth will come from the U.S. and China, which together account for nearly 60% (57.1%) of global ad dollars. That’s $44.5 billion worth of advertising this year from just those two countries alone.

GroupM’s president of business intelligence Kate Scott-Dawkins noted in her This Year Next Year ad forecast that a lot of the growth is concentrated among the biggest publishers and platforms globally. In other words, the industry is living through perhaps its most lopsided era of haves and have-nots.

“Total concentration among the top 25 ticked up again last year above 72%,” said Scott-Dawkins. “By our reckoning, if we take the top five advertising sellers of the last seven years [Google, Meta, Bytedance, Amazon and Alibaba], their compound annual growth rate was 23%. All the rest of the market, if we strip out that revenue, grew just 2.1% — slower than global GDP over the same period of time.”

The forecast tracks with the one made by key ad industry analyst Brian Wieser, who authors the Madison and Wall newsletter, earlier this month. He updated his own ad spending outlook — for the fourth time in four quarters — to peg growth in ad spending in the U.S. at 6.3% this year, up from the 4.3% increase he arrived at back in September. And that’s excluding political ad spending.

GroupM’s Scott-Dawkins upgraded her growth projections for the U.S. market in 2024 to 5.8% for 2024 and another 4.9% in 2025. Driving a good portion of the growth is retail media, which surged 22% to just under $48 billion.

That’s “based off of really strong start of the year stats from Walmart from Amazon” and other bigger retail media players, said Scott-Dawkins.

The same big-picture growth story applies to Dentsu. A month ago, the agency holding company said global ad spending will grow by 5.0% to $754.4 billion this year, up from the 4.6% it predicted at the end of 2023. This revised forecast not only outpaces the ad spending Dentsu tracked last year, which already exceeded expectations with 3.3% growth year on year, but it also beats the global economy’s growth rate by 1.8%.

That’s the thing with ad spending. It’s driven by corporations, not consumers, so it’s not as tightly linked to economic and political machinations as it used to be. The years since the pandemic have made this clear. They’ve shown that uncertainty is something ad dollars adapt to rather than being held back.

Chalk it up to the globalization of marketing spend and better measurement tools. This has made ad spending less tethered to traditional economic indicators like GDP. Sure, GDP is still a helpful proxy for understanding potential advertising trends, but it’s now just one of many factors that need to be considered.

“You can have a negative economy, and you can have positive advertising at the same time,” said Wieser. “If the relationship between GDP as a proxy for economic activity and advertising is what you’re using [to forecast], don’t assume these things even hold up at all anymore.”

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