Data & Insights

GroupM: Ad Industry to Surpass $1 Trillion in Revenue for the First Time

The WPP media investment firm released its 2024 Global End-of-Year Forecast today

GroupM projects that the advertising industry will surpass $1 trillion in total revenue for the first time by the end of 2024.GroupM

By Cydney Lee

December 6, 2024

ADWEEK House is headed to Las Vegas on January 8! Our house is your house to unwind, recharge and network during the industry’s largest consumer tech moment. RSVP.

GroupM projects that the global advertising industry will surpass $1 trillion in total revenue for the first time this year.

In its This Year Next Year 2024 End of Year Global Forecast, released today (Dec. 9), the WPP media investment firm estimates that global advertising revenue will increase 9.5% this year, up from the 7.8% growth estimate it made in its mid-year forecast in June.

GroupM predicts that advertising revenue in the U.S. specifically will grow 9% in 2024, to $379 billion, and 7% in 2025. 

The firm projects global ad revenues will reach $1.1 trillion in 2025, with pure-play digital advertising, including extensions like streaming TV, digital out-of-home (DOOH), and digital newspaper and magazine revenue, accounting for 81.7% of the total.

TV and out-of-home (OOH) will also grow next year, while audio and print revenues will remain flat and decline, respectively.

GroupM excluded the impact of U.S. political advertising in its forecast due to its skewing effect on the data. In 2024, U.S. political ad revenues reached $15.1 billion.

Digital channels drive global ad revenue

Digital channels, excluding extensions of traditional media like CTV and DOOH, were the strongest drivers of ad revenue growth in 2024. Pure-play digital advertising, including search, retail media, and social media, is expected to grow 12.4% globally this year and 10% next year, per GroupM.

Kate Scott-Dawkins, global president, business intelligence at GroupM and author of the forecast, said as digital investment grows, it will be challenging for advertisers to maintain a consistent brand perception across fragmented channels, so it’s crucial to build recognition so consumers search for a product by the brand’s name, versus by generic product names.

As platforms like Google, Meta, ByteDance, and Amazon cross over into channels like search and e-commerce, competition is driving overall growth of the market. Along with Alibaba, these five are expected to earn more than half of all ad revenue in 2024.

Looking ahead, streaming TV ad revenue is slated to grow 19.3% in 2025, per the forecast. In the U.S., streaming TV ad revenue is expected to rise to account for 35.8% of the total share of TV ad revenues.

 American made products will be key to saving money for consumers beginning in 2025! Philip Jay LeNoble, Ph.D.

Commentary

TV Ads, Tariffs, Payment Plans: Disengagement or Pricey Buys?

• by Wayne Friedman , Staff Writer, December 4, 2024

Future TV advertisers -- under the Trump administration -- will need to have some new advertising copy when it comes to the all-important holiday shopping season.

Worried about 100% tariffs leading to high prices on products coming from China and elsewhere? Some new ad copy might be a good idea, to think ahead: “New holiday shopping deadline -- for the next four years -- coming January 20th!”

Hey, don’t worry. Just keep your 2017 car running just another 40,000 miles or so. That’s right -- no new Tesla for you!

No doubt this could warm the heart of Tesla founder Elon Musk and his goal for U.S. consumer, business, and governmental efficiency.

Well, perhaps it's not all bad. President-elect Donald Trump might just pick and choose those industries in certain countries that he favors (or is against) or where he or his friends have no vested interest. Or not.

A tariff is a tax that will be borne by consumers on imported goods, according to a wide range of economists. So the price for a mobile phone will almost assuredly rise, for example.

Think that will make you now buy a totally U.S.-manufactured mobile phone -- and not one from Apple, Samsung or Google, where devices are entirely or through parts produced overseas? Maybe -- if you can find one. And if so, tell us about that purchase -- in 2029.

Executives at retailer Best Buy now say tariffs could force the retailer to raise prices -- especially consumer electronics, which are virtually all imported. Best Buy executives say around 60% of all the products it sells comes from China.

How does that affect Best Buy? Possibly less TV marketing -- or at least more strategic marketing that goes to other media.

Other categories -- automotive, consumer mobile/broadband communications companies, and quick-service restaurants -- might also experience some issues.

If consumers drastically cut out some luxury products and services they do not need immediately due to high prices, what then?

Will brands keep advertising -- at least from an awareness level?

During recessionary times, media executives believe this type of marketing at a minimum needs to continue.

Perhaps engagement-oriented TV campaigns will tout more monthly payments -- with no interest attached.

Truly, under this administration, some new TV advertising copy might read: “Buy now. Pay later.”

Commentary New Legacy Media Fitness Workout: Going to The Core

 

Commentary

New Legacy Media Fitness Workout: Going to The Core

• by Wayne Friedman , Staff Writer, December 6, 2024

So AT&T stock is up 38% since the beginning of the year, chiefly because it now is fully focused on what it does best: core mobile and broadband businesses, according to analysts.

The company has now fully divested from its media business deals, something that never meshed well with its longtime communication operations.

This includes jettisoning WarnerMedia to Discovery Inc. in April 2022 for $43 billion -- now called Warner Bros. Discovery.

A year before, it sold 30% of its stake to private equity firm TPG for $16.2 billion. In September of this year, it sold the remaining 70% part to TPG for $7.6 billion.

This is all good news for investors -- going forward.

This news comes as legacy broadband and cable TV distributor Comcast Corp. recently decided to do some in-house cleaning of its own -- a plan to spin off its core cable TV networks.

Comcast's and AT&T's stories are a bit different.

Comcast bought a majority stake in NBCUniversal in January 2011, completing full ownership in February 2013. For years, analysts have touted the merger as a rare success -- a vertical integration of a cable TV distribution/broadband company with a longtime TV/movie content company.

And Comcast is still not out of media content. The NBC Television Network, its TV stations, the Peacock streaming service, movie studio and theme parks remain.

AT&T's business maneuvers are much more obvious. It bought Time Warner for $85 billion in 2018 and sold it four years later. AT&T bought DirecTV 2015 and sold a minority stake (and operational control) in 2021.

Major digital-media companies that are financially strong, which at one time were viewed as potential buyers of these aging media businesses (linear TV networks and satellite delivered distribution) are now just interested in specific business and assets that have some growth potential.

Think about Amazon Prime Video getting the rights to “Thursday Night Football” or YouTube getting “NFL Sunday Ticket.”
More media companies will probably look to separate themselves from down-trending media businesses -- going back to their “core” businesses.

But who will be the strong and fit companies and investors looking to lift all that weight?

 

Amazon Prime Video, Netflix, Peacock, Disney+ See Highest Q3 Streamer Growth

• by Wayne Friedman , 5 hours ago

Four of the biggest growing premium streaming platforms -- Amazon Prime Video, Netflix, Disney+ and Peacock contributed heavily to nearly 50% year-over-year third-quarter growth in premium streaming advertising revenue to $3.8 billion.

Taking out the Olympics (NBCUniversal's Peacock), revenue rose 36% to an estimated $3.5 billion.

The overall analysis comes from 11 of the biggest premium streaming platforms. MoffettNathanson says taking out Olympics results and the three highest streaming growth platforms -- Prime Video, Disney+ and Netflix -- advertising video on demand (AVOD) rose 15% in the period.

Hulu had the highest revenue for the period at $782 million (up 5%), followed by Peacock at $761 million (a 114% rise); Prime Video, $441 million (230%); Netflix, $429 million (95%); Roku Channel, $331 million (22%); Pluto TV, $272 million (18%); and Tubi, $255 million (19%).

Disney+ was among the top three growth performers -- up 180% to $141 million.

Strong political advertising helped Warner Bros. Discovery direct-to-consumer (D2C) platforms (Max and Discovery+), Tubi, Pluto and Roku, MoffettNathanson says.

For the year overall, Disney+ will see the best growth for 2024 -- up 261% (to $531 million in ad revenue). PrimeVideo looks to gain 133% ($2.0 billion), with Netflix, 116% more ($1.6 billion).

For the 11 top premium streamers, 2024 revenue estimates for AVOD platforms are projected to grow 39% to $14.3 billion.

The top earners are Hulu ($3.1 billion); Peacock ($2.1 billion); Prime Video ($2.0 billion); Netflix ($1.6 billion); Roku Channel ($1.2 billion), and Pluto ($1.0 billion).

Up-to-date brand marketing education is most helpful for all local-direct businesses. Philip Jay LeNoble

Brands That Get Closest to The Consumer Win

• by Robert Wheatley , 2 hours ago

All too often, we find brands laser-focused on touting their “superior” specs -- formulations, ingredients, sourcing, process, science, engineering and standards of performance -- believing this forms the unshakeable foundation of their brand outreach path to fame and fortune.

After all, doesn’t it make sense considering the steep investments in R&D, processes, better ingredients, superior formulation skills and novel manufacturing design? Thus, the theory goes, once the world is made aware of this better tech, consumers will in turn respond by beating a path to the shelf or showroom and reward the hard work and high-quality commitment with ever increasing sales.

Better mousetrap marketing has been a foundational paradigm of go-to-market thinking since the dawn of the mass media era in the early 1950s.

Are you always reaching for product ‘betterness’?

The rinse-and-repeat environment that fosters this way of operating is woven into the institutional fabric of many brands and businesses.

Consider the regional potato chip brand that believes to beat the big guys they must be better by meticulously sourcing an improved strain of potatoes. They carefully curate a blend of frying oils to impart taste and texture without any greasy residue. In-house chefs work to test and combine the highest quality spices and flavoring ingredients for dusting the chips to assure the perfect taste notes. Their manufacturing technologists perfect a frying process to achieve the right texture and crunch. Surely this level of quality commitment and superior craftsmanship forms the foundation of a compelling story to capture the hearts and minds of chip lovers?

What if this isn’t the reason why your brand will be successful? What if the incredible investment of time, talent, quality and infrastructure is actually table stakes to your victory?

Facts don’t change minds

The brand that gets closest to the consumer wins. That means embracing your customers’ humanity.

It also means acknowledging that consumers are feeling creatures who think and not thinking creatures who feel. Facts and features serve to feed our need for confirmation bias after purchase that we’ve made the right decision. The experience with your product is rewarded by its performance because you’ve labored to produce the very best product. However, when it comes to effective outreach communication -- that’s something else entirely.

Heartfelt connection

Moving as close to the consumer as possible means putting your brand in league with them on their journey. It’s forging an emotional connection founded on trust and integrity, where the consumer understands and wants to join your brand mission and its deeper meaning. Ultimately, they see via your integrity and actions you have their best interests at heart.

Your ability to form a relationship with consumers is not based on the stats and specs of your product formulation. Relevant brand engagement operates on a higher plane of context, much like the heartfelt bonds that form between people we care about.

Sound strategy: different beats better

Uniqueness and differentiation comprise the basis of beneficial strategy, not being better. This is a zero-sum and unwinnable game of one-upmanship that operates to commoditize your business.

When you know emotion rather than analytical arguments form the basis of successful communication, how will that change your messaging approach? It’s a given that you must never dilute your quality commitments. However, when it comes to brand communication, the most effective outreach is based on emotional drivers, not specsmanship.

 A neat holiday for your local-direct Chrysler dealer to help them greet more consumers during the holiday rush period. Philip Jay LeNoble, Ph.D.

automotive

Chrysler Gets into Holiday Spirit with Elf Search

• by Tanya Gazdik , Yesterday

Stellantis' Chrysler brand is partnering with The Elf on the Shelf for a social media campaign that shows off key vehicle attributes. 

Following "Elf Return Week," Chrysler brand’s social media channels, including Instagram, Facebook and TikTok, will invite viewers to help spot The Elf on the Shelf, Scout Elf, in the Chrysler Pacifica and Chrysler Pacifica Hybrid.

Chrysler brand's social media channels will have The Elf on the Shelf-inspired content, including weekly Instagram stories and content across TikTok and Facebook, such as “Help us find The Elf on the Shelf” and polls asking fans, “where should Scout Elf go next?”

The holiday campaign, created by Razorfish, will run through Christmas Eve across Chrysler's Instagram, Facebook and TikTok social media channels.

The Elf on the Shelf campaign leverages the Chrysler Pacifica’s features to give Scout Elf new options to have some fun this holiday season, including getting cozy in one of Pacifica’s elf-size cup holders or hiding holiday gifts in Pacifica’s class-exclusive second-row Stow ‘n Go storage bin. 

Vehicle occupants can also catch up on favorite Santa movies with Pacifica’s Uconnect Theater system. After the fun, owners can clean up any candy cane or holiday messes with Pacifica’s third-row Stow ‘n Vac.

Consumers are invited to post their own photos of The Elf on the Shelf in their Chrysler Pacifica minivan across their own social media channels and to tag @Chrysler. 

While some social media users complimented the automaker on the clever campaign, others expressed frustration at not being to use their vehicles because they were stuck in service at the dealership. 

The effort follows the Halloween Trunk or Treat campaign which featured Pacifica vehicles “costumed” in three unique trunk-or-treat themes with followers voting for their favorite.

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