2024 Looks to Be a Defining Year for the Ad Market

Unpacking the latest round of ad spend forecasts

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With 2024 in sight, analysts have polished their crystal balls to predict what lies ahead for the ad industry. And after a tough post-pandemic era for the market, exasperated by high inflation and squeezed consumers, there’s finally some good news.

In 2024, global ad spend growth will turn a corner, rising to 8.2% from a modest 4.4% in 2023.

According to the latest numbers from marketing intelligence business WARC, the boost will see the market top $1 trillion for the first time ever.

With a series of tentpole events planned for 2024, including the U.S. presidential election and the Summer Olympics in Paris, advertisers aren’t fazed by lingering economic concerns; instead they’re gearing up to let loose.

“High interest rates, spiraling inflation, military conflict and natural disasters have made for a bitter cocktail over the preceding 12 months,” reflected James McDonald, director of data, intelligence and forecasting at WARC.

Now, he believes the latest figures prove the ad industry is about to rebound. However, a closer look at other data points paints a more nuanced picture across markets.

Geographical indictors

In the U.K., the quarterly Bellwether Report from the Institute of Practitioners in Advertising (IPA), which canvases the sentiment of 300 brand leaders, has predicted that ad spending will decline in the country by 0.6% in 2024, rebounding in 2025 with 1.3% growth.

Predicting a “shallow recession,” the report expects contractions in ad spending of 0.6% and 0.4% in 2023 and 2024 respectively.

“While Q3 showed encouraging signs that brands are eschewing short-term, quick fix tactics, only those that commit to holding their nerve for long-term brand building will thrive,” said Clare Hutchinson, chief strategy officer at VCCP London.

WARC’s U.K. data takes a rosier view of the market, pitting that ad budgets will increase by 3.9% in 2024 to hit $45 million (£37.5 million).

It forecasts that the U.S. market will account for just over one-third of global ad spend, predicting it will increase 7.6% in 2024 to hit $326.7 billion.

Industry analyst Brian Wieser, meanwhile, has predicted that U.S. ad industry revenues (excluding political advertising) will climb 5% to $363 billion in 2023 and rise another 4.3% in 2024. IPG’s Magna insights unit, meanwhile, upgraded its U.S. ad growth forecast to upward from 5% to 5.6%.

Across the Atlantic, WARC said Europe was expecting a rise of 0.6% in 2023 and 3.6% in 2024, while the Middle East is expected to see ad budgets upped by 6.2% in 2024. In South Asia, a 12.1% 2024 bump is anticipated, and Southeast Asia will grow by 4.6% in 2024.

Latin America’s ad spend will rise 0.8% in 2023 and 5.2% in 2024. Africa was the only continent set to be down 11.6% this year, with growth returning in 2024.

So where are CMOs spending?

Digital advertising—including display, video, search and social—are dominating global media plans, according to several of the reports published.

Five major tech firms—Alibaba, Alphabet, Amazon, TikTok owner ByteDance and Meta—will together rake in over half (51.9%) of global advertising spend this year. In the process, the companies will see revenues rise 9.1%.

Unsurprisingly, increasingly advanced retail media networks will capture a larger proportion of budgets in 2024.

WARC expects retail media spending will be up 10.2% year over year, and forecast to rise to $141.7 billion in 2024, and on track to overtake linear TV as the third-largest channel by spend within a few years.

“To be sure, Amazon is by far the biggest player in this space, but they are far from the only beneficiaries of marketers shifting spending in this direction,” said Madison and Wall’s Wieser, agreeing it was a “stand out sector” and pointing to companies such as Walmart, Instacart, Ebay, Uber, Criteo, Booking.com and Expedia.

While this is an exciting new space, Dominic Charles, managing director of audience intelligence and marketing science at Wavemaker U.K., urged CMOs not to get distracted by bells and whistles.

“Whilst better than anticipated growth in overall advertising spend is an encouraging sign, these figures still paint a picture of caution in how advertisers are prioritizing their investment,” he observed.

Charles noted how it would be easy for brands to dust off their 2008 recession playbooks, but cautioned that a short-term digital bonanza would carry consequences.

“Channels like TV, radio and newsbrands have been proven to be as, if not more, effective at driving performance as digital channels, and have the advantage of creating significantly stronger long-term effects to boot,” he argued.

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