Global Advertising Growth Is Expected to Slow in 2024, Excluding Elections Spending
Worldwide ad spending excluding U.S. political campaigns will reach $936 billion next year, GroupM said in a new forecast
The growth in global ad spending is poised to slow in 2024 to 5.3%, excluding U.S. political advertising, according to a new forecast from media investment group GroupM.
That would mark a deceleration from the 5.8% increase that GroupM anticipates for this year, the forecast said.
GroupM, part of advertising holding giant WPP, said growth might be adversely affected next year by potential factors such as high interest rates’ effect on consumer and business spending. It also said that a spate of China-based companies, which have spent heavily to acquire international consumers, might become less of a force for advertising growth in 2024 as U.S. household savings ebb and Europe potentially sees economic contraction.
Global ad spending excluding political activity is expected to reach $889 billion this year and $936 billion in 2024, according to the forecast. Despite fears about economic uncertainty in 2023, GroupM’s new forecast for this year is just 0.1 percentage points lower than a previous prediction for 2023 issued in December 2022.
“We’ve been through quite a bit of volatility over the last five years or so,” said Kate Scott-Dawkins, president of business intelligence at GroupM and author of the report. “We had been expecting more of a deceleration out in the future. I think we’re looking now at innovation through AI and digitalization of these channels—that has pushed us to expect a bit more stable, rather than more sharply decelerating, growth out over the next five years.”
Another closely watched forecast also suggested a slowdown in ad growth was approaching. Excluding cyclical events such as political elections and sports, global advertising spending in 2024 is poised to grow 5.8%, down from an expected 6.5% in 2023, according to Magna, a media investment firm that is part of Interpublic Group’s Mediabrands and conducts industry research.
Including cyclical events, however, Magna expects ad spending growth to rise to 7.2% next year from 5.5% in 2023, driven by economic stabilization, lower inflation, digital innovation and the return of those major cyclical events.
Most advertising growth is landing in the hands of major digital players, according to the GroupM forecast. The top five global sellers of ads, according to GroupM— Alibaba, Amazon.com, Bytedance, Meta Platforms and Alphabet’s Google—increased their ad revenue 25.4% on a compound annual basis from 2016 to 2022, beating the 9.3% pace of the total advertising market. That growth has come as advertisers sought out those players’ artificial intelligence tools, their ability to target messages to specific users and their self-service ad-buying platforms.
By 2028, spending on digital advertising will be larger than spending on the entire advertising industry in 2022, GroupM said.
“We seem to have reached a significant inflection point in the realization that linear TV is well and truly in decline, growth in advertising is dominated by a handful of large media and commerce companies, and the economics of this industry are predicated on this new world order, where large advertisers and agencies make up a minority of revenue for some of their largest partners,” the report said.