Advertising spend in the Middle East is set to rise 8.1 per cent in 2024, subject to change should conflict spread beyond Gaza, a recent report by WARC revealed.
Similarly, brand spend in the Middle East and Africa is currently on course to rise by 4.2 per cent to $12.6 billion this year, though fortunes are mixed. African spend is expected to be flat, up by 0.2 percent, following a 15.7 per cent decline in 2023 and 1.4 per cent dip in 2022.
Globally, ad spend growth is also anticipated to jump 7.2 per cent next year and 7 per cent in 2026, culminating in a global ad market worth $1.23 trillion.
James McDonald, Director of Data, Intelligence and Forecasting, WARC, and author of the research said, “The global ad market has doubled in size over the last decade, with advertising investment growing almost three times faster than economic output since 2014. Three companies – Alphabet, Amazon and Meta – have been the largest beneficiaries from this period of expansion, attracting seven in ten incremental ad dollars over the last ten years.”
This trifecta is expected to attract 43.6 per cent of all advertising spend this year, rising to a share over 46 per cent by 2026, according to the report.
Advanced neural network ML model predictions
WARC’s latest global projections are based on data aggregated from 100 markets. New for this edition, WARC is now leveraging an advanced neural network machine learning model which 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.
The new projections also show that ‘pureplay’ (i.e. online only) internet companies are set to record a 14 per cent rise in advertising revenue this year, reaching a total of $735.7 billion, globally.
In total, almost nine in every ten (88.5 per cent) incremental dollars spent on advertising this year will go to online-only businesses, with half (52.9 per cent) being paid to Alphabet, Amazon and Meta. Taken together, pureplay platforms are set to account for over 70% of all advertising spend worldwide next year.
Ad spend powered by retail media and CTV
Retail media (+21.3 per cent), social media (+14.2 per cent) and search (+12.1 per cent) are set to lead digital growth in 2024, with these three sectors alone accounting for over 85% of online spend and almost three in every five (58.7 per cent) incremental dollars spent on advertising worldwide this year.
All are benefiting from the increased adoption of AI-driven ad services and growing appreciation of first party data.
“With retail media expected to lead ad spend growth over the coming years, and with new, diverse players emerging in ad selling – from Uber to Chase – we are once again seeing the value of first party data in targeting the right person with the right message at the right time. Such data, combined with new AI enhancements, will constitute the fabric of the advertising industry for the next decade and beyond,” McDonald added.
Retail media is expected to account for 14.3 per cent of global ad spend this year – a total of $152.6 billion – which is double the share recorded in 2019 before the pandemic contributed to an exceptional growth spurt. Indeed, retail media is expected to be the fastest-growing channel over at least the next three years.
CTV is on course to be worth $35.3 billion to advertisers this year, roughly a quarter of the size of the linear TV market. Growth is rapid; CTV spend is expected to rise 19.6 per cent and is set to account for two-thirds of all growth in the video (linear + CTV) market this year, and all growth in 2025. By 2026, CTV is projected to account for almost a quarter (23.9 per cent) of all video ad spend, at $46.3 billion.
Legacy media and linear TV
Legacy media, encompassing print publishing, broadcast radio, linear TV, cinema and out of home (OOH), now collectively account for a quarter (25.3 per cent) of total advertising spend, having recorded a dip in share in each of the last 15 years.
Advertising spend on legacy media is expected to total $270.5 billion this year, representing a 1.5 per cent rise from 2023. Much of this growth can be attributed to US political spending; with this removed legacy media are, collectively, set to record a 0.5% decline in advertiser investment in 2024.
Linear TV spend is expected to grow by 1.9 per cent this year, its best performance since 2014 if the post-Covid recovery year of 2021 (+12.7 per cent) were excluded. The market is flat (+0.1 per cent), however, excluding US political spend. Out of home (+7.2 per cent) and cinema (+6.1 per cent) will see some growth this year, though radio (-2.3 per cent) is expected to record its third consecutive year of decline. Newsbrands (-3.3 per cent) and magazine brands (-3.4 per cent) are also due to see losses across print and online editions.
Social media takes a chunk of global ad spend
At $241.8 billion in 2024, social media is the largest single advertising channel measured in WARC’s study, having overtaken search (excl. retail media) for the first time last year. It accounts for 22.6 per cent of all global ad spend this year and is forecast to rise to a share of 23.6 per cent by the end of 2026.
Within social, Meta is the largest individual player, commanding 62.6 per cent of the market this year. Its share is being eroded however, most notably by Douyin and TikTok owner Bytedance, which now draws a fifth (20.1 per cent) of all social spend, up from a share of just 9.3% five years ago.
TikTok is on course to account for over half of its parent-company’s advertising revenue for the first time next year with estimated ad billings over $28 billion, though uncertainty remains around the platform’s future in the US – its largest market by far with 170m monthly active users.
The main social platforms have reported a fillip from new, AI-enabled services during the first half of 2024, a trend that is set to underpin the advertising industry at large over the coming years. Over half of all AI-enabled spend – defined as involving some form of recommendation algorithm, natural language processing or search optimisation – today occurs in the social media sector.
Google, Amazon, Netflix in numbers
Search advertising (excluding retail media) accounts for 21.8 per cent of global advertising spend, at a forecast total of $223.8 billion this year. Its share has consistently grown since WARC began monitoring the sector in 2013, though it is set to plateau in 2026 as more purchase journeys begin in retail media environments and social commerce begins to realise its potential outside of Asia. Another potential headwind may be the rise of AI-driven search, and uncertainty around what the ad experience will look like for consumers more familiar with text-based search experiences.
Google accounts for more than four-fifths (84.0 per cent) of the global search market, with its paid search revenue set to top $200 billion for the first time next year. Google’s share rises to over 90 per cent if China is excluded, a position of dominance which this month led a US judge to rule the company in breach of antitrust laws.
Amazon is the dominant global player, with anticipated ad revenue (excluding Twitch and Prime Video) of $55.9 billion equivalent to more than a third (36.6 per cent) of all retail media spend and over two-thirds excluding China this year. While competition is heating up, such billings eclipse the near $4bn Walmart is due to net in 2024 and the $1bn ad business Uber is building, while Amazon is also due to have surpassed Alibaba by ad revenue for the first time this year.
Netflix is the largest streaming provider globally, with 277.6m subscribers worldwide in Q2 2024. However, its global advertising business is unlikely to grow too far beyond $1 billion this year. YouTube’s ad income – which we do not yet classify as CTV – is expected to rise 14.3 per cent to $36 billion this year. Further, YouTube’s ad revenue is set to top $45 billion globally by 2026, almost as much as the entirety of the global CTV industry at that time.
