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Diving overview:
- A blog post from WPP Media said the advertising market appears to be more resilient than previously expected as the industry deals with disruption caused by tariffs and capitalizes on the artificial intelligence boom.
- WPP's media investment unit has revised up its full-year forecast, now predicting global advertising revenue will rise 8.8% to $1.14 trillion, compared with previous expectations for a 6% increase. This momentum is expected to continue through 2026, with advertising revenue expected to increase by 7.1% in a year that includes the upcoming Winter Olympics and FIFA World Cup.
- WPP Media highlighted changes in channels related to ad-supported streaming, retail media, the creator economy, and AI-powered search. The agency has introduced new categories for evaluation as content remains the main driver of investment while diversifying into new areas.
Dive Insight:
WPP Media agrees with other forecasters that the impact on the advertising market from factors such as tariffs will be softer than initially expected, leading to an upward revision to 2025 macro spending forecasts. While the Trump administration's signature economic policies appear to have intensified the gloomy consumer mood around the holidays, brands are still pouring money into emerging channels like retail media and gaming to reach shoppers on tighter budgets and away from traditional media.
AI will also continue to play a leading role, acting as both a magnet for investment and a disruptor of many aspects of marketing. According to WPP Media, AI is having a significant impact on content creation, media planning, measurement, and consumer interactions, but the industry is well-positioned to handle major changes due to its established integration with machine learning. As AI reshapes the digital economy, the agency recently replaced the categorization of “search” with “intelligence.” WPP Media's parent company is fully committed to AI as part of its turnaround strategy.
Content-driven advertising, a category that spans everything from social media to traditional newspapers and magazines, makes up the largest portion of the global market, accounting for $663.5 billion and a 58% share of revenue in 2025. Within this category, gaming is the fastest growing channel, with revenue expected to increase 29.5% this year to $8.5 billion. However, games still represent only a small portion of the total content, or 0.7%.
The commerce sector, which includes the fast-growing retail media sector, is predicted by WPP Media to surpass traditional television in global advertising revenue for the first time in 2025, at $178.2 billion. China is the largest region for commerce-related advertising, with revenue of $76.3 billion in 2025, followed by the United States with approximately $58 billion.
The report suggests that retail media will face further pressure to consolidate in the future, with some revenue potentially cannibalized by AI. The retail media model for monetizing first-party data has been adopted in other industries, and WPP Media has added financial services media networks and travel media networks as new categories to its analysis.
WPP Media said 2026 will carry over some of this year's momentum, but total revenue growth will decline by nearly 2 percent despite repeated high-profile cyclical events for brand sponsorship, such as the World Cup and the Olympics. Next year's midterm season will be another hot one, but officials have excluded U.S. political ad spending from top-level forecasts.
