Growth trends

In 2024, growth continued to be driven by digital, retail media and TV, including linear and streaming, according to several of the reports, although some said remaining issues in streaming TV, including around measurement, could hold advertisers back from investing heavily there. Meanwhile, retail media might be on the verge of taking significant share from streaming in particular.

Advertising growth continues to outpace overall global and economic growth, several reports highlighted. GroupM called out the International Monetary Fund’s recent world economic forecast, projecting GDP growth of 3.2% in both 2024 and 2025, and 3.3% in 2026.

Kate Scott-Dawkins, global president of business intelligence at GroupM, said that it’s impressive that advertising continues to outpace worldwide economic growth, even as inflation has gone up. However, over the next four years, GroupM projects “just slightly better advertising growth than normal GDP growth,” or at least that the two growth figures will be more in line, she said during a recent call to discuss the agency’s report.

The rise in AI products and the use of that technology to make advertising work more effectively and efficiently, Scott-Dawkins argued, may have a more positive effect on future ad growth.

Among “the couple of things that could potentially impact it to the upside, we are expecting a rise in, [what] I’m calling AI endemic advertisers,” she said. “There’s likely to be an influx of advertising from existing players that are really pushing new AI products.”

AI highlights

GroupM’s report included a few highlights on how AI can impact advertising.

The agency predicted that, with the introduction of tools such as GPT wrappers (designed to improve accessibility and usability of generative AI), AI interior design and AI code developers, it’s “relatively inexpensive to spin up a consumer-facing site or offer AI-powered automation tools to enterprise companies, with costs increasing along with query and compute requirements.” These companies will look to consolidate market share and grow categories, and “we expect many will rely heavily on marketing and advertising” to do that, according to GroupM’s report.

Within search, GroupM said there have been advancements in AI that could be a boon to advertising, although there are no “clear revenue impacts as of yet—at the time of writing, Google’s integration of ads within AI Overview has been part of an experimental phase and ChatGPT search remains ad free. But the expense of developing cutting edge AI products and services means that monetization via advertising is likely to be a key part of future offerings,” the agency said in the report.

What are the possible headwinds?

Those predicting more tepid growth in 2025 point to possible geopolitical factors that could negatively impact growth, especially in the U.S.

Madison and Wall’s Wieser lowered his forecast for 2025 U.S. ad revenue to 4.5% from a previous 5.3% projection, due to President-elect Donald Trump’s proposed policies including new tariffs on imported goods.

“Although some observers (and, at this time, equity markets) may be willfully optimistic that tax cuts and other policies will be positive for the economy, implicitly anticipating that business ‘continues as usual’ over the next four years, we are inclined to believe that policies more likely-than-not to take effect are net negative for the US advertising market,” he wrote in the report.

Wieser also argued that lower inflation, driven by tax cuts and lower interest rates that Trump has promised, could negatively impact advertising. “If high inflation results in greater friction in the economy or otherwise contributes to a reduction in economic activity (i.e. stagflation) then it’s possible that inflation will lead to less economic growth, and all else held equal, less advertising activity,” he wrote.