Online-only businesses like Alphabet, Amazon and Meta to capture 68.8% of global adex in 2025

New Delhi: A new study from WARC has found that global advertising spend is on course to grow 10.7% this year to a total of $1.08 trillion—the strongest growth rate in six years and the largest absolute rise on record if the post-Covid recovery of 2021 (+27.9% year-on-year) is disregarded. 

The new forecast, published, represents a 0.2 percentage point (pp) upgrade on WARC’s last global forecast in August.

Ad spend growth is also anticipated next year (+7.6%) and in 2026 (+7.0%), culminating in a global advertising market worth $1.24 trillion. Global ad investment has more than doubled over the last decade and has grown 2.8x faster than global economic output since 2014. 

WARC’s latest global projections are based on data aggregated from 100 markets worldwide. New for this edition, WARC is leveraging a proprietary neural network that projects advertising investment patterns based on over two million data points, spanning macroeconomic data, media owner revenue, marketing expenses from the world's largest advertisers, media consumption trends and media cost inflation. It is believed to be one of the most comprehensive advertising market models available to the industry today.

While the headline growth rate is mostly being driven by online media, a good year for TV has also made a notable contribution. Linear TV spend is expected to end the year 1.9% higher, at $153.6bn, following two years of decline. TV has been boosted by political advertising—particularly in the US—during the fourth quarter and both the Paris Olympics and the Euro 2024 football tournament in the third. Linear TV now accounts for just 14.3% of global advertising spend, however, down from a peak of 41.3% in 2013.

Building upon a solid performance for legacy media, pure play internet, which encompasses advertising revenue among online-only businesses such as Alphabet, Amazon and Meta, is poised to grow by 14.1% to a total of $741.4bn—over two-thirds (68.8%) of all ad spend.

Social media is the largest individual sector within pure play internet—and the largest advertising medium of all by extension—with a total of $252.7bn this year, equivalent to 23.5% of the global ad market. Prospects for the social market have been revised upwards this year to +19.3%, owing mostly to stronger-than-expected results for Facebook, Instagram and TikTok over the first nine months of the year.

Key themes outlined in WARC’s global ad spend outlook 2024/25 Q4 update are:

Google’s 90% share of search market is a monopoly, DOJ rules

One in five dollars (22.1%) spent on advertising outside of China is paid to Google for its search services. Further, at an expected $197.7bn in 2024 (+13.0% year-on-year), Google alone accounts for 90.1% of all search advertising (excluding China). These commanding shares are similar in the US, leading the Department of Justice (DOJ) to rule last week that Google has an effective monopoly on the search market. 

The court believes that Google also uses its search dominance to inflate the cost per click (up by approximately 7.5% this year) and maintain superior targeting, effectively blocking competitors from offering viable alternatives.

Outcomes from the ruling range from Google ceasing payments to handset manufacturers and others for default preference—at a cost of approximately $30bn per annum—to the selling off of its Chrome business to a third party. 

One potential suitor—Bing—still struggles with adoption and advertiser investment despite Microsoft’s $100bn investment, accounting for just 5.9% of search spend outside of China. Bing’s ad revenues are expected to be up just 5.1% this year—compared to a rise of 11.9% for total search and 13.0% for Google—to a total of $12.9bn.

Apple already makes $5.1bn from search ads, mostly via its app store, per Omdia Advertising Intelligence estimates, and could create its own search engine given its financial and distribution resources. The device manufacturer may hesitate to proceed, however, due to the high costs associated with maintaining a search business aside from a general strategic misalignment. A leftfield entrant—perhaps Elon Musk’s X on the lookout for new revenue streams after losing $5.9bn in ad revenue since its 2022 takeover—may materialise, but on the whole, natural successors to Google remain unclear.

With the ongoing uncertainty around the practicalities of the DOJ ruling and the probability that Google will appeal it vigorously in the coming months, WARC is maintaining its growth forecast of +9.0% next year and +7.0% in 2026 for the company while the situation develops, leaving a potential $231 billion ad business and $32.9 billion of growth in the balance over the next two years.

Holidays are coming

Advertisers the world over are expected to spend $299.2bn during the final quarter of the year, well over half of which will be spent during the holiday season. This represents a 10.2% rise from the previous year, up marginally (+0.2pp) from our August forecast.

The fourth quarter is crucial for retailers, typically accounting for over 30% of annual ad spend within the sector, which represents the intense battle for consumer salience and share of wallet each year. Retailers will spend $45.6bn on advertising during Q4 2024, up 5.0% compared to last year. TV is set to attract 15.9% of this spend, at $6.8bn, with nearing a quarter (23.3%) of this $1.6bn spent on ads delivered via connected TVs (CTV) so as to leverage the additional targeting capabilities these devices can afford advertisers.

Advertising on retail media platforms is also set to peak during the fourth quarter as brands vie to reach consumers close to the point of purchase. Globally, retail media spend is forecast to rise 16.4% in Q4 2024 to a total of $46.2bn—a new high. Amazon alone is expected to net $16.9bn from advertisers at this time, up 18.0% from the previous year.

The technology and electronics sector is expected to spend most in online retail media environments during the fourth quarter, with an anticipated total of $7.2bn, up 18.7% from last year. For context, this is over three times more than the sector spends on TV. 

It’s also a big time of year for fast-moving consumer goods (FMCG) brands, with the alcoholic drinks (+13.5% to $3.9bn), cosmetics (+13.8% to $5.2bn), food (+19.4% to $5.4bn) and soft drinks (+22.0% to $4.5bn) sectors all increasing retail media spend and allocating an increasing share of their ad budgets to online retail platforms this year.

Overall, retail media ad spend is forecast to reach $154.8bn this year, with a further rise of 14.8% expected next year and 13.5% in 2026, by when the market would be worth $201.6bn.