With global ad spending expected to top $1 trillion for the first time in the coming years, the global advertising business is poised to achieve new heights. WARC predicts that worldwide expenditure on advertising will increase by 4.4% in 2023 and by another 8.2% in 2024 in its Global Ad Spend Outlook 2023/24 research. The rise of social media, in-store media, and Internet-connected television will fuel this expansion.
Big Tech’s Absolute Dominance
The research identifies five key internet giants whose impact is on the rise and who are anticipated to garner a significant percentage of global ad spending: Alibaba, Alphabet, Amazon, ByteDance, and Meta. These firms will take in 50.7% of worldwide expenditure in 2023, and 51.9% the following year. Their advertising income is expected to grow by 9.1 percent in 2023 and 10.7 percent in 2024, while the average income of all businesses in their sector is predicted to decrease.
America Is Setting the Pace
The United States is expected to play a significant role in worldwide ad expenditure, with a projected 31% share of the total. Advertising expenditures in the United States are forecast to grow by 2.2% to $303.6 billion in 2023 and by 7.6% to $326.7 billion in 2024. We may thank the forthcoming presidential election and other high-profile events like the Olympics for this expansion.
The Increasing Sway of Social Media
The analysis predicts that by 2024, social media platforms will account for $227.2 billion in ad expenditure, or more than a fifth (21.8%) of the total spend. Facebook, Instagram, and WhatsApp’s parent company, Meta, is estimated to earn more than $146 billion in advertising income this year. ByteDance, the company that owns TikTok, is predicted to earn about $40 billion in advertising revenue, or 17.6% of the total.
The Development of Store-Based Media
Channel expenditure is predicted to increase by 10.2% in 2023 and 10.5% in 2024, making retail media yet another industry poised for rapid growth. Advertising expenditure is expected to reach $141.7 billion by 2024, with retail media receiving 13.6%. With an estimated $52.7 billion in retail media expenditure, Amazon is poised to take a commanding lead in this space. Alibaba, however, is anticipated to encounter competition in the expanding Chinese market from up-and-coming firms like Pindoudou, JD.com, and Meitaun.
The Explosion of Internet-Enabled Television
The market for connected television (CTV) is expected to expand rapidly over the next several years, increasing by 11.4 percent in 2023 and 12.1 percent in 2024 to a total of $33 billion. It represents just 3.2% of total advertising expenditure, but 16.2% of CTV and linear TV spending put together. Linear TV is predicted to drop by 5.4% in 2023 as a result of this expansion. Growth of 3.5% is forecasted for 2024 as political and athletic events serve to reinvigorate the sector. Despite this reduction, linear TV will still account for 15.6% of worldwide ad expenditure in 2024, making it the third biggest advertising medium in the world.
The Persistent Role of Search Engine Marketing
Spending on search advertising is projected to reach $229.2 billion in 2024, making about 22% of overall advertising expenditures. Despite certain warning signs, Google is expected to continue its domination of the search industry and bring in $190.5 billion from ads that year. Bing is predicted to maintain roughly 6% of the market share in China, while Baidu, the country’s most popular search engine, is predicted to decrease to 6.5%.
Developing Markets
The industries forecasted to have the greatest increases in advertising expenditure are also highlighted in the research. The growth rate in the financial services industry will be 11.5%, followed by the tech and electronics industry (+11.3%) and the pharmaceutical and healthcare industries (+11%). Food, home & domestic, tobacco, and soft drink CPG sectors will also witness development, with an emphasis on retail media channels.
Conclusion
Ad expenditure is forecasted to rise to over $1 trillion in the future years as the global advertising business continues to develop. This increase may be attributed to a number of factors, including the dominance of large technology firms, the impact of social media platforms, the expansion of retail media, the popularity of connected TV, and the importance of search advertising. The sector is set for record-breaking years, thanks to significant events and better trade circumstances. Marketers in today’s more competitive environment need to adjust to these new realities and use first-party data to better target their consumers.
See first source: Marketing Dive
FAQ
Q1: What is the projected growth in worldwide advertising expenditure for 2023 and 2024?
A: WARC predicts a 4.4% increase in global ad spending for 2023 and an 8.2% increase for 2024 in its Global Ad Spend Outlook 2023/24 research.
Q2: Which five internet giants are expected to dominate global ad spending?
A: The research highlights Alibaba, Alphabet, Amazon, ByteDance, and Meta as the key players anticipated to capture a significant percentage of global ad spending.
Q3: What percentage of worldwide ad expenditure are these five giants expected to secure in 2023 and 2024?
A: In 2023, they are projected to take in 50.7% of global ad spending, and this is expected to rise to 51.9% in 2024.
Q4: What is the expected growth rate of their advertising income compared to the average for businesses in their sector?
A: Their advertising income is forecasted to grow by 9.1% in 2023 and 10.7% in 2024, while the average income of businesses in their sector is expected to decrease.
Q5: Which country is expected to play a significant role in global ad expenditure?
A: The United States is projected to have a 31% share of the total ad expenditure.
Q6: What is the projected growth rate for advertising expenditures in the United States for 2023 and 2024?
A: Ad spending in the United States is predicted to grow by 2.2% to $303.6 billion in 2023 and by 7.6% to $326.7 billion in 2024.
Q7: How much ad expenditure is expected to be accounted for by social media platforms by 2024?
A: Social media platforms are predicted to account for $227.2 billion or 21.8% of the total ad spend by 2024.
Q8: Which social media platforms are expected to lead in advertising income?
A: Facebook, Instagram, and Meta are estimated to earn over $146 billion in advertising income. ByteDance, the owner of TikTok, is expected to earn about $40 billion.
Q9: Which industry is predicted to experience rapid growth in ad expenditure?
A: Retail media is poised for rapid growth with an expected 10.2% increase in 2023 and 10.5% in 2024. Amazon is anticipated to take a significant lead in this space.
Q10: How is the market for connected television (CTV) expected to grow?
A: The CTV market is projected to expand by 11.4% in 2023 and 12.1% in 2024, reaching a total of $33 billion. This represents 16.2% of CTV and linear TV spending combined.
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