• Resilient Transformation: The Evolving Advertising Landscape

  • Nov 15 2024
  • Length: 3 mins
  • Podcast

Resilient Transformation: The Evolving Advertising Landscape

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  • Summary

  • The current state of the advertising industry is marked by resilience and transformation. Despite economic uncertainties, ad spending is projected to surge by 4.4% this year to reach $570 billion in the US, excluding political advertising[3]. This growth is driven by strategic spending, with advertisers navigating through turbulent economic conditions by outpacing emerging competitors or capitalizing on the missteps of incumbents.

    Digital advertising continues to be a significant driver of growth, with online advertising spending expected to jump to $252.8 billion this year, representing a 12.4% increase[1]. Connected TV (CTV) advertising is particularly on the rise, with CTV in-stream video internet advertising spending expected to grow by 17.1% this year and at a compound annual growth rate (CAGR) of 12.4% through 2028[1].

    The rise of free ad-supported TV (FAST) channels is also a notable trend, with ad revenue via FAST channels predicted to hit $5.3 billion in 2023 and surge to $6.1 billion by 2025[2]. This growth is driven by consumer demand, with nearly 1,000 new FAST channels debuting in 2022, bringing the total number of channels to 3,720.

    Social media advertising remains a dominant force, with global social media ad spend reaching $230 billion in 2022 and predicted to climb to $303 billion in 2024[2]. TikTok, in particular, has made significant strides, with ad revenue on the platform hitting $11.64 billion in 2022 and expected to reach $23.58 billion by the end of 2024[2].

    The industry is also seeing a shift towards short-form video content, with 44% of marketers using it and 26% planning to invest more in it than any other format in 2024[4]. AI is also driving marketing industry growth, with 64% of marketers already using it and 38% planning to start in 2024[4].

    In response to current challenges, advertising industry leaders are focusing on strategic spending, exploring new opportunities to engage with customers, and promoting their products or services while spending cautiously. For example, prominent advertisers like Mondelez, Clorox, and Adidas have disclosed significant increases in their ad spending during the last quarter or have committed to further ramping it up throughout 2024[3].

    Overall, the advertising industry is navigating through a period of transformation, driven by technological advancements, changing consumer behavior, and economic uncertainties. Despite these challenges, the industry remains resilient, with ad spending projected to continue growing in the coming years.
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