Connect with us

Business

Global ad market prospects further downgraded as retailers, automakers cut ad budgets and Chinese brands redirect spend due to US trade tariffs

Published

11 months ago

on

Global ad market

Growth forecasts for advertising spend have been downgraded further this year (-0.5pp to +6.2%) following an initial $20bn cut in March

Key sectors such as retail (-6.1%) and automotive (-4.0%) are expected to cut ad budgets in the wake of mounting tariff pressures on supply chains

Alphabet, Amazon and Meta are set to take a combined market share of 54.7% excluding China this year – equivalent to $524.4bn – rising to 56.2% in 2026

US ad market prospects cut by half a point to +5.2% as Chinese retailers such as Temu and Shein redirect spend to Canada, Australia and Europe

Global ad market growth is expected to accelerate to 6.5% next year, with a total of $1.23trn equivalent to almost $150 per capita

WARC Global Ad Forecast Q2 2025 update: Growth cut amid trade trepidations

12 June 2025 – A new study from WARC, the experts in marketing effectiveness, has found that global advertising spend is now on course to grow 6.2% this year to $1.16trn, a downgrade of half a percentage point (pp) from WARC’s March forecast due to growing market volatility. Key sectors such as retail (-6.1%) and automotive (-4.0%) are set to cut ad spend this year, while ad spend growth across technology and CPG brands is muted compared to previous rates.

James McDonald, Director of Data, Intelligence & Forecasting, WARC, and author of the research, says: “The latest downgrade is attributable to a reticence to commit ad budgets across key markets in the second quarter. This cooling is underpinned by tariff trepidations and ebbing business and consumer confidence, prompting advertisers to front-load budgets and reallocate spend geographically, particularly towards Canada, Australia, and Europe.

“Trade tensions are forcing major sectors to rethink their ad strategies. Automakers are cutting back amid rising costs and a pivot to performance media, while retailers tighten budgets as tariffs squeeze margins. Tech firms face growing uncertainty despite continued investment, and CPG brands are leaning into retail media as supply chains come under pressure. Across the board, agility is the new imperative.”

WARC’s latest global projections are based on data aggregated from 100 markets worldwide, and leverage a proprietary neural network which projects advertising investment patterns based on over two million data points.

Key media outlook: AI propels Alphabet, Amazon and Meta to 54.7% market share outside of China

Search to account for more than a fifth (21.5%) of the ad market this year, with spend rising 7.4% to $248.6bn despite regulatory threats
Social media – the largest single advertising medium globally – is poised to account for a quarter (25.8%) of all ad spend this year, at a total of $298.3bn
Retail media set to be fastest growing advertising medium this year (+14.4%), though trade disruption threatens ad receipts from consumer packaged goods (CPG) brands

Pure play internet – encompassing social media, retail media, online display, online classified and paid search – grew 11.5% in the first quarter of 2025 to $195.2bn, equivalent to 70.8% of all global ad spend. The growth rate is expected to ease to 9.9% during the second quarter and 8.9% over the second half of the year – to an annual total of $829.2bn (+9.8% vs. 2024).

The pure play internet sector is on course to top $1trn in ad revenue in 2028, by when it would account for almost 80% of all advertising spend. Alphabet, Meta and Amazon’s combined share of advertising spend outside of China is expected to reach 54.7% this year (+1.8pp vs. 2024) with an aggregated total of $524.4bn. This share is set to rise further – to 56.2% – next year.

Within the pure play internet total, search advertising spend is forecast to rise 7.4% this year and 6.8% next, by when the market would be worth $265.5bn – equivalent to 21.5% of all spend, up from 21.2% in 2024.

Within the paid search total, Google’s expected $213.3bn take would account for 85.8% of the market this year. The embedding of artificial intelligence into the search journey stands to disrupt ad revenue models, but Google’s dominance in search advertising will likely persist in the near term, aided by SMEs.

Social media is now set to account for over a quarter of all ad spend this year. A strong first quarter rise of 14.9% precedes an expected slowdown, with growth averaging 11.2% over the coming three quarters as tariffs begin to impact Asian brands disproportionally. The social market is still on track to grow 12.0% to $298.3bn this year.

​​Meta last month outlined plans for an end-to-end AI solution covering the generation of creative, ad placement and performance optimisation – primarily for its long tail of small advertisers rather than large brands. Meta’s ad business is forecast to grow 12.6% to $142.1bn this year, a cooling from the 18.4% rise recorded in 2024.

Retail media is expected to be the fastest-growing medium tracked by WARC this year, with an anticipated rise of 14.4% to a total value of $176.2bn. This represents a 15.2% share of global ad spend this year.

Amazon’s retail media ad business grew 21.0% to $13.3bn during the first quarter, accounting for a third (33.4%) of the global retail media market. WARC projects Amazon’s ad income will grow by 16.1% to $60.6bn this year. A further rise, of 14.9%, is forecast next year, giving Amazon a 35.4% of global retail media spend and 5.7% of all advertising spend worldwide. Like other online retailers, Amazon is exposed to tariffs imposed on its Chinese sellers, thought to be well over half of all vendors on the platform.

Global video advertising spend is forecast to decline by 2.6% in 2025 to $183.9bn, equating to 15.9% of all spend this year. The contraction is driven by a continued decline in linear TV, which still represents over three-quarters of the total video market.

Linear TV spend is expected to fall by 6.3% this year – a drop exacerbated by 2024 major sporting and political events. Notably, 2025 marks the first year that retail media will command a greater share of global ad spend than linear TV.

Video-on-demand (VOD) advertising is forecast to rise by 13.2% to $39.9bn, a downgrade from the 15.4% projected in March. Within this, Netflix is due to see ad billings double this year (from a small base) due to the relative resilience of its ad tier during economic downturns.

Key product sector trends: Tariff trepidations hit retailers and automakers

Automotive ad spend down 4.0% this year as manufacturing stalls and key players pare back on brand building
Retailers set to reduce ad spend by 6.1% as margins tighten; US retailers are vulnerable to disruption among Chinese suppliers
Ad growth set to slow markedly among tech & electronic and consumer packaged goods (CPG) brands as barriers to trade impair access to components

The automotive industry invested $56.8bn in advertising last year with almost a quarter (22.9%) going to premium video formats. However, budgets are shifting from video towards digital platforms, with automotive spend on social ads surpassing linear TV for the first time in 2025.

Despite WARC’s projected 4.0% cut in automotive advertising spend this year (an improvement on the 7.3% originally projected in March), the sector should rebound next year with a 7.5% rise pushing spend to a total of $58.6bn.

Retail, with projected ad spend of $166.1bn this year (14.3% of the global ad market), faces a fall of 6.1% from 2024 levels. This largely reflects impending US trade tariffs on key goods and raw materials, which are poised to increase costs for global retailers, particularly those heavily reliant on Chinese imports such as Amazon and Walmart.

Retailers are set to accelerate shifts in marketing strategies in response to changing cost structures and consumer behaviour. As predicted in March, large Chinese retailers targeting US consumers – including Temu and Shein – have reallocated advertising spend to other markets such as Canada, Australia and Europe.

The tech and electronics sector is expected to spend $90.3bn on advertising this year. This year-on-year rise of 5.5% represents a cut from our +6.2% forecast in March, and is a sharp slowdown from the 24.3% rise recorded last year. Tariffs are driving the sector to adjust go-to-market strategies, shifting investments toward less-affected regions or different product lines to buffer against hardware margin erosion.

Consumer Packaged Goods (CPG) companies experienced their weakest first quarter sales revenues since the pandemic. Further, with tariffs reaching as high as 145% for Chinese imports and additional tariffs on goods from Canada and Mexico, CPG companies are facing major disruption to their established supply chains.

WARC expects core CPG sectors, such as soft drinks (+7.1%), toiletries & cosmetics (+7.2%) and household & domestic (+4.2%) to record growth in advertising spend at a global level this year, though all see a significant slowdown from 2024. Taken together, the CPG sector is expected to increase advertising spend by 6.7% this year to a total of $200.5bn.

Key market outlook: US growth prospects cut as Chinese brands look elsewhere

US ad market expected to post a +5.2% rise this year, less than half that recorded in 2024 (+13.5%) and has been cut by half a point since March
Canadian ad spend growth set to ease to 3.5% this year despite some Chinese advertisers redirecting spend from the US
The Chinese ad market continues to struggle with weak domestic demand; growth is set to slow to 7.2% this year
The UK, German, French and Japanese economies are all stalling and present a severe risk of stagflation over the forecast period

WARC’s latest forecast suggests the US ad market will grow 5.2% this year to $451.6bn, half the growth rate recorded in 2024 (+13.5%) and representing a 0.5 point downgrade from our March forecast. The US ad market – the largest worldwide with a 39.0% share – faces major headwinds including tariff uncertainty, disrupted supply chains, lower consumer demand and stagflation.

Despite a strong first quarter performance – +7.6% to $105.7bn, boosted by Chinese brands accelerating spend ahead of the anticipated tariff changes – US ad market growth is expected to slow significantly through to year-end.

Chinese brands appear to be redirecting ad spend to Canada to negate US market barriers, yet Canadian ad growth is expected to slow to 3.2% this year amid deteriorating economic conditions. The IMF had downgraded Canada’s GDP growth forecast by 0.6pp to 1.4%, with the Bank of Canada projecting growth rate to approximately +0.5% in 2025.

Digital platforms dominate Canada’s media landscape, projected to capture 77.6% of the total market this year. This digital transformation stems from granular targeting capabilities drawing advertisers away from traditional media, with retail media now fuelling additional growth.

China is experiencing significant structural shifts, characterised by increasingly price-conscious consumers and a digital ecosystem dominated by major players including ByteDance (Douyin), Alibaba, and Tencent, creating challenges for smaller platforms. Short-form video has become instrumental in brand promotion in China, while marketers are prioritising performance marketing over brand building initiatives.

Projected US tariffs are expected to dull China’s economic growth by 0.2 points in 2025, creating economic uncertainty and prompting a downward revision of our 2025 advertising growth expectations to 7.2% (from 8.3% in March). The outlook for 2026 has been upgraded to 7.9% growth (from 6.9%), reflecting the online sector’s resilience.

The AA/WARC Expenditure Report forecast for the UK ad market stands at +6.5% in 2025, to a total of £44.3bn ($54.7bn). The highly digitalised UK market sees online ads accounting for over four in five (84.6%) dollars this year, with social (+13.1% this year) and search (+8.2%) fuelling growth despite weak economic prospects.

Germany’s economy is also struggling, at just +0.4% expected growth by the OECD this year following a cut of 0.3pp from its last outlook. WARC forecasts a modest 2.9% rise in German advertising spend to €26.4bn ($29.5bn). Growth in France’s ad market is also set to be muted this year, at +2.7% to €18.8bn ($20.3bn). Japan faces a challenging outlook, too, with advertising spend expected to rise by 3.3% to ¥5.8trn ($39.0bn) this year.

 

Home  Facebook

Related Topics:
Continue Reading
Advertisement

Business

From Megawatt (MW) to Gigawatt (GW): Why Africa Must Think in Grid-Scale Power to Compete in the Artificial Intelligence (AI) Economy

Published

8 hours ago

on

May 11, 2026

By

As AI infrastructure drives power demand into the gigawatt range, Africa must move beyond incremental energy planning – placing grid-scale generation at the center of discussions at African Energy Week 2026’s AI and Data Center Track

CAPE TOWN, South Africa, May 11, 2026/APO Group/ –The rapid expansion of artificial intelligence is fundamentally reshaping global energy demand, with implications that extend well beyond traditional power planning. Nowhere is this more apparent than in the growing energy footprint of data centers. Facilities that once required tens of megawatts are now being developed at 100–200 MW scale, with hyperscale campuses increasingly aggregating demand into the gigawatt range.

 

This shift presents a structural challenge for Africa. While the continent is rich in energy resources, its planning frameworks remain largely oriented around incremental, megawatt-scale additions – often tied to localized demand or short-term capacity gaps. In the context of AI-driven infrastructure, this approach is increasingly misaligned with the scale and concentration of future demand.

Africa’s data center sector, while growing, remains at an early stage. Operational capacity currently stands at approximately 300–400 MW, with projections reaching 1.5–2.2 GW by 2030. At the same time, demand is accelerating rapidly: electricity consumption from data centers is rising at 20–25% annually and is expected to reach around 8,000 GWh in the near term. This growth mirrors a broader global surge, with data center power demand projected to approach 945 TWh by 2030, driven largely by AI workloads.

This is ultimately about aligning Africa’s energy strategy with where global demand is heading

What distinguishes AI-related demand is not only its scale, but its concentration and consistency. Unlike many traditional industrial loads, data centers require uninterrupted, high-quality power, often with built-in redundancy. This places new demands on grid design, prioritizing stability, capacity and long-term scalability over incremental expansion.

Meeting these requirements will require a departure from conventional planning models. Rather than adding capacity in small increments, there is a growing case for developing gigawatt-scale generation aligned with emerging digital infrastructure hubs. This means integrating power generation, transmission and data center development into coordinated investment strategies, particularly in markets with strong resource bases and improving regulatory environments.

It also requires a shift in how excess capacity is viewed. In many African power systems, surplus generation has historically been treated as a financial inefficiency. In the context of AI and digital infrastructure, however, maintaining a margin of available capacity can enhance grid stability, reduce outages and provide the flexibility needed to support rapid load growth, while creating a foundation for broader industrial development.

A useful benchmark can be seen in Northern Virginia, the world’s largest data center market, where installed capacity has now exceeded 4 GW and more than 1 GW of new supply was added in a single year, reflecting the rapid pace at which hyperscale infrastructure is being deployed. Driven by major cloud and AI players, demand has tightened the market significantly, with vacancy rates approaching zero and most new capacity released well in advance. The scale and speed of development highlight how quickly data center demand is expanding – and underscore the level at which infrastructure must be planned.

These dynamics are increasingly shaping the policy conversation. At African Energy Week 2026, the AI and Data Center Track will focus on the infrastructure required to support this transition, with a particular emphasis on aligning energy planning with digital economy objectives. As AI infrastructure scales, reliable and abundant power is no longer a supporting factor, but a prerequisite.

“This is ultimately about aligning Africa’s energy strategy with where global demand is heading,” says NJ Ayuk, Executive Chairman of the African Energy Chamber. “If we continue to plan in megawatts, we will struggle to compete in an economy that is already moving at the gigawatt scale. Building larger, more resilient power systems is not just about meeting demand – it is about creating the conditions for investment, innovation and long-term growth.”

Distributed by APO Group on behalf of African Energy Chamber.

Continue Reading

Business

Telecoming Strengthens Its Presence in Africa with the Launch of DCB Software South Africa

Published

8 hours ago

on

May 11, 2026

By

The company advances its regional strategy with a model built on AI, monetisation and direct connectivity with local operators

JOHANNESBURG, South Africa, May 11, 2026/APO Group/ –Telecoming (www.Telecoming.com), a global technology company specialising in the monetisation of digital services, announces the launch of DCB Software South Africa (www.DCBSoftwareZA.com), its new local subsidiary. The move reinforces the company’s growth strategy in Africa, one of the most promising markets in the mobile economy.

The new entity will be led by Javier de Corral, who will lead business development, establish partnerships with telecom operators and build a local team based in Johannesburg.

The South African launch builds on Telecoming’s existing footprint in the continent, where it already operates through its Algerian subsidiary, DCB Software Dzayer, further strengthening its regional position.

We are very excited about the opportunities in South Africa and committed to investing in its digital future

DCB Software South Africa will operate as a local hub focused on AI-driven digital services, supported by a team entirely based in the country. Its scope includes the development of digital products, mobile and web services, as well as solutions in digital entertainment and marketplaces, all built on scalable, multi-device platforms designed to ensure a seamless user experience.

The subsidiary combines in-depth knowledge of the South African and Sub-Saharan markets with direct access to telecom operators, digital platforms and local payment solutions. It will deploy multiple monetisation models, including Direct Carrier Billing (DCB), to optimise conversion rates and overall performance.

“The launch of DCB Software South Africa marks a key milestone in our global expansion strategy”, said Cyrille Thivat, CEO of Telecoming. “We are very excited about the opportunities in South Africa and committed to investing in its digital future. With Javier de Corral at the helm, we are confident that this new subsidiary will not only drive our local growth but also contribute to the broader digital and AI ecosystem.”

Telecoming develops technology designed to enhance user acquisition, streamline payment processes and improve the performance of digital services. Its platforms integrate monetisation, advertising and user experience, leveraging artificial intelligence to deliver secure, scalable and efficient solutions.

This expansion reinforces Telecoming’s commitment to delivering innovative digital and AI services and strengthens its position as a key player in the African market. With this launch, the company takes another step in its international expansion, enhancing its ability to support the development of Africa’s digital ecosystem through advanced technology, local expertise and strategic partnerships.

Distributed by APO Group on behalf of Telecoming.

Continue Reading

Business

Enlit Africa 2026 makes 20 May the Commercial and Industrial (C&I) delivery day across power, water and clean energy hubs

Published

8 hours ago

on

May 11, 2026

By

Taking place 19–21 May 2026 at the Cape Town International Convention Centre (CTICC), Enlit Africa, created by VUKA Group, convenes utilities, municipalities, large energy users, financiers, developers and technology providers to focus on what shifts outcomes in African infrastructure

CAPE TOWN, South Africa, May 11, 2026/APO Group/ –Enlit Africa 2026 will put commercial and industrial delivery front and center on Wednesday 20 May with a dedicated line-up across the Power Hub, Water Hub and Renewable Energy & Storage Hub. The day is built for decision-makers who must keep operations running, secure reliable supply, manage risk and move projects from concept to implementation.

 

Taking place 19–21 May 2026 at the Cape Town International Convention Centre (CTICC), Enlit Africa, created by VUKA Group, convenes utilities, municipalities, large energy users, financiers, developers and technology providers to focus on what shifts outcomes in African infrastructure.

On 20 May, the programme is anchored by the keynote, “How a coordinated energy/water plan could change African resilience” (09:30–11:45), positioning water and energy as interlinked operational risks that can no longer be managed in silos. From there, the day breaks into practical tracks tailored for large users and the solution partners that support them.

In the Renewable Energy & Storage Hub, sessions focus on the realities of C&I adoption and delivery at scale, including “Project implementation for multi-megawatt C&I projects” (11:45–13:00) and “Clean energy adoption in the C&I market” (14:30–15:45), before turning to fleet electrification and operations with “Mobility: Management of electric vehicle fleets for C&I” (16:00–17:30).

In the Water Hub, the agenda targets the technologies and operating models that matter most to industrial continuity and compliance. Sessions include “Next-generation water treatment technologies” (11:45–13:00), “Advanced water treatment & smart water systems” (14:30–15:45) and “Accelerating water technology deployment for C&I operations” (16:30–17:30).

Together, the three stages create a single day of high-signal, implementation-led content for C&I leaders, utilities, municipalities and suppliers focused on operational performance, investment readiness and delivery discipline.

Distributed by APO Group on behalf of VUKA Group.

Continue Reading

Trending

Exit mobile version