WPP’s GroupM and IPG Mediabrands’ Magna have released data around annual predictions related to search, retail media, social, and video.
Within GroupM’s digital ad-revenue numbers, the agency forecasts search will see the slowest growth, with a compounded annual growth rate (CAGR) of 4.1%. Retail media will grow by 9.3%.
Other – a category that includes social media and short-form video — will grow 8.5% on a compound basis.
GroupM forecasts that at the close of 2023, retail media will have become the fastest-growing digital channel — forecast to improve 9.3% compared with 2022.
Growth in 2024 will decelerate as retailers likely add net-new non-endemic advertisers to rosters, and share shifts take place as smaller players challenge Amazon’s dominance.
Walmart, which reported $2.7 billion in advertising revenue in 2022, is likely to take in more than $3 billion worldwide in 2023, which should earn it a position in GroupM’s top 25 global ad-sellers list.
Two events will affect search, artificial intelligence (AI), and the pending ruling against Google in the Federal Trade Commission (FTC) antitrust lawsuit, although it is unlikely that they will lead to a significant structural change for the company.
GroupM estimates that companies mentioned AI 443 times in earnings calls for Microsoft and Alphabet in 2023.
Digital ad revenue is forecast to grow 11.2% in 2023 after ad sellers including Meta, Alphabet (Google), Amazon, Spotify, Pinterest, Microsoft, and Snap all reported accelerating growth in the third quarter, according to GroupM.
The growth excludes connected television (CTV), digital out-of-home (DOOH), and other digital extensions of traditional media from the data.
IPG Mediabrands’ Magna released its winter update, Global Ad Forecast, which predicts that net advertising revenue for media owners will rise 5.5% to $853 billion this year, and by 7.2% in 2024.
The data suggests Keyword Search and ecommerce will remain the most popular ad formats — up 9% to about $298 billion in 2023.
The U.S. market for search grew 10% this year, driven by retail media, which represents 23% of total search advertising revenue outside of China.
Retail Media Networks generated $124 billion of ad revenues globally in 2023, and about $43 billion in the U.S. Retail Media Networks represent 15% of global advertising revenue. Some 87% went into keyword search-based formats.
Magna predicts global Retail Media Networks — mostly run by e-commerce platforms like Amazon or traditional retailers like Walmart — will rise 20% outside of China.