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Forecast Shows Online Audio Spending Growing Three-Times Faster Than Overall Ad Market.


Online audio ad spending is expected to grow at a faster pace next year according to a new global ad outlook from WARC. While it does not release U.S.-specific figures, WARC estimates online audio ad spending will grow 6.8% this year to reach $6.2 billion worldwide. And next year it forecasts another 8.4% in growth, bringing global online audio ad spending to $7.2 billion.


Yet the analysis also shows that despite growth rates four-times the size of AM/FM, online audio still has a much smaller share of the global ad market – 0.7% for online versus 3.0% for broadcast in 2023, according to WARC estimates.


For broadcast radio, the firm sees a turnaround in the works. Despite a predicted 2.4% decline in global radio ad spending this year, WARC forecasts radio will recover next year with a 2.2% growth rate with global radio revenue figures projected to climb from $28.7 billion to $29.4 billion.


The forecasts suggest social media will be the fastest-growing medium in 2024, with spend rising to a total of $227.2 billion next year. Retail media will also be among the fastest-growing advertising channels worldwide. Connected TV is also projected to grow this year (+11.4%) and next year (+12.1%). But broadcast TV spending will drop 5.4% this year with political returning it to a 3.5% growth rate next year according to the forecast. Outdoor (+7.3%), and cinema (+5.2%) are also set to see advertiser spending gains in the year to come, though losses are expected for print media (-1.9%).


The overall U.S. ad market is forecast to grow 2.2% this year with even stronger gains expected in the year to come. While this year U.S. advertisers are projected to spend $303.5 billion, WARC predicts a further 7.6% growth rate for next year when a projected $326.7 billion will be spent.


“High interest rates, spiraling inflation, military conflict, and natural disasters have made for a bitter cocktail over the preceding 12 months,” says James McDonald, Director of Data, Intelligence, and Forecasting at WARC. “But the latest earnings season shows that the ad market has withstood this turbulence and has now turned a corner.”


Nearly a third of every dollar spent (31%) worldwide is in the U.S. market. The gains here will help propel the global ad market to what WARC predicts will be the first trillion-dollar year in 2024 when it says advertising spending will increase 8.2% on top of its forecast 4.4% growth rate for this year. Global ad spending in 2024 will be boosted by the U.S. presidential campaign – WARC says political spend is estimated to reach $15.5 billion globally next year – and sporting events such as the Paris Olympics next summer.


The new analysis for the first time combines data from WARC’s proprietary survey of media owners, industry bodies, ad agencies and research organizations in 100 markets worldwide with advertising revenue data from 40 of the largest media owners to offer a complete picture of advertising trade.


Where can podcasters and other media outlets look for growth? The WARC analysis of global ad spending by product sector shows that financial services (+11.5%) is on course to be the fastest growing sector in 2024, followed by technology and electronics (+11.3%) and pharmaceutical and health care (+11.0%). The analysis says the automotive sector is also poised to grow well (+4.7% in 2024) after a period of decline due to supply-side issues.


Within service sectors, rises in advertising spend are expected next year within the media and publishing sector (+3.3%) – which includes companies such as Netflix – as well as leisure and entertainment (+3.9%) and telecom and utilities (+10.4%). More muted growth is expected in the retail segment.


Broadcasters have complained that the U.S. tech giants have increasingly siphoned off ad dollars that previously were spent with local media outlets. WARC’s analysis suggests it is a worldwide phenomenon. The data shows that just five companies – Alibaba, Alphabet, Amazon, Bytedance and Meta – will attract over half (50.7%) of global spend this year and will consolidate that position into 2024 with a share of 51.9%.


“Our new measurements show how the fortunes of just five companies have a major bearing on the prospects of the industry at large, and that these companies are on course to record oversized gains in the coming months,” McDonald said.


WARC forecasts advertising revenue among this group is expected to rise 9.1% this year and 10.7% next year, while ad revenue among all other media owners combined will be flat this year.

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