The news: Global advertising revenues will surpass $1 trillion for the first time in 2024, growing 9.5% to $1.04 trillion and reaching $1.1 trillion in 2025, according to GroupM's latest forecast.

• Digital platforms will capture 72.9% of total ad revenues by 2025, rising to 76.8% by 2029; our own forecast has penetration as high as 78.1% in some regions already (see chart).
• The top five digital platforms—Google, Meta, ByteDance, Amazon, and Alibaba—will control more than half of global ad revenues this year.
• Retail media will overtake global TV ad revenues in 2025, reaching $176.9 billion and representing 15.9% of global total ad spend.

Why it matters: While our own forecasts differ for a number of reasons, the GroupM report echoes a clear reframe: the advertising industry is undergoing a fundamental shift.

• Streaming TV ad revenues will grow 19.3% in 2025, while linear TV declines 3.4%.
• AI adoption by major platforms is driving enhanced targeting and measurement capabilities, though full reliance on AI-driven ad purchasing remains distant.
• Pure-play digital advertising” (including search, retail media, and social) will rise 12.4% in 2024 and 10% in 2025, outpacing traditional channels.

Market dynamics:

• The US, China, and UK are expected to remain the largest markets for ad revenue growth in 2025.
• US political advertising reached $15.1 billion in 2024, up 30% from 2020.
• The Asia-Pacific region, particularly China, leads retail media growth, with India expected to see retail media surpass search advertising revenues by 2025.

Channel shifts:

• Linear TV will maintain 72.6% of global TV ad revenues in 2025, despite a declining share.
• Streaming will represent 37.5% of US TV ad revenues by 2029.
• The disparity in ad loads—12 minutes per hour on linear TV against 4–5 minutes for streaming—raises questions about format effectiveness.
• Advertisers face increasing challenges maintaining consistent brand identity across fragmented media platforms.

Our take: While 2024's trillion-dollar milestone reflects the industry's robust growth, the real story is the accelerating shift toward digital channels and retail media.

• AI adoption by major platforms and the continued decline of traditional media suggest this transformation will only speed up.
• However, geopolitical factors, including US-China relations under President-elect Donald Trump, could affect this trajectory, particularly in emerging markets where retail media is driving digital growth. It could also impact the robust ad spending of players like Temu and Shein.

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