Retail Media and connected TV are expected to be big engines for digital advertising growth in 2024, according to the inaugural U.S. ad spending forecast from Advertiser Perceptions.
Digital ad spending, which has eclipsed spending on traditional media, is expected to increase 10% in 2024 after rising 11.7% to a record $283 billion in 2023. Advertisers Perceptions also sees digital spending increasing10$ in 2025.
Retail media is expected to jump 30% to $64.7 billion in 2024 and rise to $81.6 billion in 2025, representing 23.5% of all digital advertising in the U.S.
“Brands have been pouring money into retail media over the past few years,” said Eric Haggstrom, director of business intelligence and head of forecasting for Advertiser Perceptions.
“While we expect this trend to continue, retail media will evolve significantly in the coming years. As ad auctions on retailers’ own properties become saturated, brands will look to utilize retailers’ data to power their buys outside of retailers’ digital walls,” Haggstrom said. “Media and ad tech companies need to form relationships with retail media platforms or risk missing out on one of the few large and quickly growing segments of the digital advertising market.”
The presidential election and the Olympics are expected to push the growth of connected TV advertising. Advertiser Perceptions forecasts a 16.2% increase in CTV spending in 2024.
“This is a conservative estimate, however, as spending could be driven higher by the election and more success by Amazon Prime Video’s ad tier,” the company said.
Spending on social media is expected to grow by 14% in 2024 and 11.8% in 2025.
Most of the increase is seen coming from spending on short videos on TikTok, Instagram Reels and YouTube Shorts.
Advertiser Perceptions said it expected programmatic spending on mobile, and desktops to be flat to up single digits.
“The advertising market will be strong in 2024, buoyed in large part by the presidential election and the upcoming Olympics,” Haggstrom said. “Retail media, social media and CTV will be the biggest drivers of growth over the next two years, as advertisers not only prefer both the targeting and creative opportunities available through these digital channels but also can prove the ROI.”
Advertiser Perception based its report on an analysis of financial reports from more than 100 publicly-traded companies involved in ad sales, the largest ad buyers in the world, research from government statistical organizations, and years of Advertiser Perceptions syndicated research.
