A recent study by the World Advertising Research Centre (Warc) reveals a noteworthy prediction. The report projects that for the first time, total global advertising expenditure will exceed $1 trillion, reaching $1.07 trillion by 2024. This projection is an adjustment from its previous growth rate prediction for 2024, now estimated at 10.5 percent. In addition, a further growth of 7.2 percent is projected for the following year.
Such a robust forecast benefits three giants in the advertising industry globally – Meta, Amazon, and Alphabet, the parent company of Google and YouTube. These triumvirates, known for their dominance in social media, retail media and search, respectively, are projected to attract 43.6 percent of all advertising expenditure. This share is predicted to escalate to above 46 percent by 2026.
One critical aspect driving these boom times in retail media and supporting double-digit increases in social media and search advertising is the rising use of artificial intelligence (AI) tools. Meta, Amazon, and Alphabet capture more than half of this year’s additional advertising expenditure. Over the past ten years, these three corporations attracted approximately 70 percent of the extra advertising spend, signifying an impressive consolidation of financial prowess over a relatively brief period.
However, traditional media – comprising print publishing, radio broadcasting, linear television, cinema, and outdoor advertising – holds precariously onto a quarter, 25.3 percent, of total advertising expenditure. This sector experienced a continual reduction in its share over the last 15 years. Despite this, there may be a silver lining as the rise in US political outlay this year is projected to stimulate a 1.5 percent increase in traditional media advertising.
If not for the political face-off between Kamala Harris and Donald Trump, traditional media would experience a 0.5 percent decrease in advertising expenditure, according to Warc. Contesting in the US presidency isn’t a low-cost affair. Predictions place US political advertising expenditure at a staggering $15.8 billion this year, with social platforms drawing more than a fifth, approximated at $3.6 billion. This record-breaking figure signifies a 40 percent increase from the 2020 electoral race.
While the competition was between Joe Biden and Trump, advertising expenditure had indeed fallen behind that of 2020. Only after a change in the Democratic candidate has there been a surge in advertisement revenue. Hence, even though Harris is yet to secure a victory in the elections, her candidacy appears to have already proved beneficial for business.