Global advertising spend will surpass $1trn (£788bn) next year as the world’s economy recovers from inflation, according to projections from Warc.
Global ad spend is expected to reach $963.5bn (£739.5bn) this year, representing 4.4% growth for the market globally. However, the UK market specifically is forecast to decline in US dollars terms by 1% in 2023.
Europe as a whole is expected to grow slowly in 2023, with ad spend growing just 0.6%. The UK is the largest single ad market in Europe with a 4.6% share. However, the UK’s projected decline this year is something of an anomaly among other major markets in the region, with Spain forecast to grow 5.6%, Italy by 3.2%, and Germany by 2.7%.
In 2024, global ad spend is forecast to rise 8.2% to reach the landmark $1trn figure. The European rate will also see a stronger rate of growth versus this year, growing at 3.6%, as economic fortunes improve. According to a July forecast from the AA/Warc, UK ad spend will grow just 1.1% in real terms next year.
In terms of where the growing global ad spend is going, five companies continue to dominate. Ecommerce business Alibaba, Google parent Alphabet, Amazon, TikTok owner Bytedance, and parent of Facebook and Instagram, Meta, are predicted to attract more than half of global ad spend this year. That dominance will continue into next year, with these companies forecast to grow their share to 51.9%.
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Social media in general will be the fastest growing channel for ad spend in the next couple of years, according to Warc’s projections. Next year social media will soak up over a fifth of total ad spend, worth $227.2bn (£179.7bn). Meta alone controls almost two-thirds (64.6%) of the social media ad market.
TikTok parent company Bytedance is the next biggest social media player, with an estimated $39.6bn (£31.3bn) ad revenue income in 2024; however, it is around three and a half times smaller than Meta.
Retail media is also forecast to see notable growth. It is projected to rise 10.2% this year and 10.5% next year to a total of $141.7bn (£112.1bn), representing 13.6% of all ad spend. Amazon alone is the destination for almost two-fifths (37.5%) of all ad spend in retail media. However, while multinationals like Alibaba and Amazon continue to see growth, more local players, such as UK supermarkets Tesco and Asda, are continuing to invest in their retail media offerings to capture a slice of the growing market.
Financial services will be the fastest growing sector in terms of ad spend in 2024, as it is projected to grow by 11.5%. Technology and electronics (11.3%) and pharma and health (11.0%) are not far behind.
With the US election coming up in 2024, political advertising spend is forecast to reach a new high of $15.5bn (£12.2bn).