Dec 5, 2023

WPP’s GroupM and IPG Mediabrands’ Magna have releaseddata 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 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 decelerateas 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 inadvertising 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. advertisement advertisement Two events willaffect 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 significantstructural 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 grow11.2% 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. Thegrowth excludes connected television (CTV), digital out-of-home (DOOH), and other digital extensions of traditional media from the data. IPG Mediabrands’ Magna released its winterupdate, 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 andecommerce 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 totalsearch-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 Networksrepresent 15% of global advertising revenue. Some 87% went into keyword search-based formats. Magna predicts global Retail Media Networks -- mostly run by ecommerce platforms like Amazon ortraditional retailers like Walmart -- will rise 20% outside of China. Although Search has seen growth, it was far outpaced by social, which witnessed 14% growth. Social and Video formats hitdouble-digit growth based on better monetization of the rapidly growing short vertical video impressions. This year, social-media companies like Meta, and TikTok are expected to grow 15% to$182 billion, while short-form pure-play video platforms like YouTube and Twitch are forecast to grow by 9% to $70 billion.