Global Ad Revenue to Surpass $1 Trillion in 2025 as GroupM Boosts 2024 Forecast for U.S., China

Global advertising spending will grow 7.8 percent in 2024 to $989.8 billion and increase a further 6.8 percent in 2025 to $1.1 trillion, according to a new forecast from ad media giant GroupM. The updated estimates are up from a December projection for a 5.3 percent ad gain this year.

Thanks to the expected momentum, the industry will surpass the trillion dollar milestone in 2025, one year earlier than previously forecast, GroupM emphasized.

“The increases in the total revenue for these years are largely due to revised forecasts for China, which we now estimate will record $199.4 billion in 2024 versus the $148.2 we wrote in our last forecast,” the firm explained. “These gains are primarily within digital pure-play and out-of-home advertising. We have also revised estimates for the U.S., which we now expect to reach $365.9 billion in ad revenue, up 5.8 percent over 2023’s $345.9 billion, excluding the impact of political advertising in both years.”

The firm’s December forecast had called for ad revenue growth of 4.1 percent gain in 2024. For 2025, GroupM now projects a 4.9 percent U.S. gain.

“While there are potential cracks under the surface, such as the increase in buy-now-pay-later debt, rising delinquency on auto loans and credit cards, and slowing sales at some national retail outlets, the overall resiliency of consumer spending, especially among more affluent consumers, has driven continued economic growth (1.6 percent in the first quarter of 2024),” GroupM explained. “Robust digital growth, as evidenced by the first-quarter earnings results from many of the top 25 global media owners, as well as expected continued cross-border advertising from China, appear to support an advertising growth rate higher than nominal growth domestic product growth this year.”

Digital ad gains are the key driver of industry growth, GroupM emphasized. “As is the case with global advertising, [U.S.] digital revenue is the engine of growth in 2024 and 2025,” it said. “U.S. total pure-play digital ad revenue will rise 8.9 percent in 2024 to $262.1 billion, excluding political advertising. Growth over the next five years will be a still-robust 6.4 percent on a compound annual basis.”

Within the digital ad category, search will represent 34.3 percent, retail 18.3 percent, and “other” digital the remaining 47.4 percent of revenue in 2024, according to the new forecast. “Retail media will be the
fastest-growing segment again in 2024 (albeit from a smaller base than other digital), adding $8.6 billion (or 22 percent ) to reach a total of $47.9 billion in ad revenue,” GroupM highlighted. “This will be sufficient to pass traditional TV ad revenue, one year earlier than we had previously forecast.” The largest retail media owners in the U.S. by its estimates are Amazon, Walmart, Instacart, eBay, and Target.

Meanwhile, U.S. TV ad revenue, including both traditional and connected TV (CTV), but not political advertising, will decline 0.6 percent in 2024 to $64.1 billion, according to the latest GroupM forecast. “CTV will represent $19.4 billion of that, or 30.2 percent,” it noted. “By 2029, CTV will account for 51.5 peercent of all TV ad revenue. Note that we now include some YouTube revenue in our CTV total and expected YouTube growth is contributing to the predicted double-digit growth rates for CTV over the
next four years.”

In contrast, U.S. pay-TV operators have continued to lose subscribers. “By the end of 2024, we expect pay-TV households will represent less than half of total U.S. households,” GroupM wrote in its report. “Cable companies have looked to bundling streaming services as part of a new cable bundle. Comcast recently announced an option for their subscribers to add Peacock Premium (with ads), Netflix (with ads) and Apple TV+ for $15.99 per month. We expect further aggregation of streaming properties and branded channels over the next one to two years as media and technology owners continue to rationalize costs and cement longer-term customer relationships.”