WARC’s Trillion dollar ad spend forecast – industry comment

Despite the current economic turbulence, the global advertising market is set to pass the trillion dollar market for the first time in the coming year, driven by the biggest players in the social media and e-commerce sectors.

This is how WARC’s latest ad spend report, published last week, sees the near term future, as the world reels from nearly two years of excessive inflation, energy price hikes and growing pressure on the consumer.

So, what do those at the leading edge of the advertising and adtech sectors have to say about that trillion dollar prediction?…

Amy Wright, Global Head of Creative Strategy, Automated Creative

Adland has experienced a tough few years, with the pandemic creating a difficult run for both industry and consumers.

And, just as we crawled clear of Covid, the cost of living crisis hit, putting marketing budgets and household spends under pressure everywhere.

Media money is beginning to flow again – albeit slowly in Europe – and social is the channel continuing to drive much of this growth, with spend rising to a total of $227.2bn next year.

The key, moving forward, will be for brands to look for ways to advertise efficiently through raising creative effectiveness while providing the best ad experiences for consumers in a privacy-first way.

Richard Parsons, Founding Partner, True

The dominance of global advertising’s big five players means that these companies have more power and can raise their rates.

In comparison, it’s hard to see how smaller networks and publishers can compete without the same resources in terms of audience reach and the delivery of effective campaigns.

The increase in global spend looks like good news, but for the UK, predicting a dip is a reality check. Slower growth of advertising spend in the UK could be a part of its economic weakness.

But this should be a time when advertisers are investing to get ahead of competition, especially as CPMs normally fall during a downturn.

With those two less cheerful aspects of the report in mind, there is some good news in CTV increasing its share of spend.

As a B2B media specialist, we’re seeing connected TV really taking off for our clients across sectors and when the financial market is stormy, it’s great to have that break in the clouds.

Piero Pavone, CEO, Preciso

The rise of retail media is no surprise to us, and there is also nothing unexpected in the fact that Amazon sits at the centre of this trend, but the size of its share does emphasise the importance for tools that benefit smaller retailers who wish to operate outside Amazon’s shadow – for instance, Shopify merchants.

As the big get bigger, small retailers need to be aware of the sheer power at those companies’ disposal; they need to do what they can to maximise their customer data, retain customer loyalty and optimise campaigns around their own products and stores, in order to ensure that retail media isn’t simply dominated by those with the greatest resources.

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