WARC, or the World Advertising Research Centre to give it its full name, has said global ad spend passed US$1 trillion (AU$1.61 trillion) for the first time and expects to grow 10.7 per cent to US$1.08 trillion (AU$1.74 trillion) this year.
In fact, global ad spend has more than doubled over the last decade, 2.8 times faster than global economic output since 2014.
“Today, media is so vast, so complex, and so changeable, that it can be difficult for brands to make sense of it all. As we reach the midpoint of the decade, this is also the most exciting time to be a media planner,” said Paul Stringer, managing editor, research and insights, WARC.
“Digital advertising has matured beyond direct-response to support brand-building and long-term effectiveness, advertisers are focusing more on quality over cost when deciding which media environments to advertise in, and signal fidelity is improving thanks to the growth of AI-powered media solutions and an influx of retail media and commerce media networks.”
WARC predicts that channels including influencers, podcasts and gaming will see ad spend and sentiment shifts in 2025 and that advertisers are adapting campaigns for platforms where attention is more fleeting, and lots of little exposures need to work together to improve brand outcomes.
Search and social, meanwhile, will require advertisers to adapt campaigns to fit the preferences of algorithms. This may mean adopting new methods and processes, or putting more trust in AI systems to automate parts of campaign management—even if this means sacrificing autonomy and control.
Retail media will reach US$154.8 billion (AU$249 billion) in advertising spend globally in 2024 with a further 14.8 per cent rise expected in 2025.
The sector is “becoming the infrastructure” that “underpins the entire digital advertising ecosystem,” according to WARC and it now offers advertisers the chance to reach customers across the entire purchase journey.
Advertisers will need to weigh retail media opportunities carefully—especially when it comes to long-term brand measurement. WARC also said that new entrants may struggle to win spend from incumbents and advertisers are “overwhelmed” by the options available and the lack of standardisation across platforms. I
In the short-term, WARC said this may curtail the growth of new entrants as advertisers prioritise working with just a few large and established networks. WARC also said many advertisers “appear to be divesting from traditional advertising channels” to spend more on lower-funnel ads on retail media networks. It advises them to protect traditional advertising budgets to avoid falling into a vicious cycle of weakening their brand, while raising the cost of driving performance on retail media properties.
WARC estimates that more than US$220 billion (US$354 billion) will be spent on search globally, with Google taking four-fifths of the pot. However, the kids preference for social as a search channel may threaten Google’s dominance. Publishers and advertisers will also need to rethink their SEO games as AI search continues to grow.
“In the near future, brands may need to optimise messaging and content to ensure they are visible and represented favourably in AI-based search results,” WARC wrote.
Naturally, this way of optimising content requires very different skills to traditional SEO.
