Forecast: Ad Budgets to Switch to These Digital Channels

According to financial analyst Brian Wieser, ad spending in the US is expected to grow by 5.6% throughout 2024 to reach $360 billion. These predictions exclude political advertising, which Wieser expects to account for $15.5 billion across all media channels.

Wieser expects digital advertising to account for 76% of all advertising spending in 2028 compared to 64% in 2023. With brands spending more ad dollars across digital channels, digital ad revenue could grow at almost twice the rate of overall ad spending (10.7% this year). Retail media and social commerce will likely lead the digital advertising game.

Even today, retail media is a booming business. Previously used primarily between suppliers/manufacturers and retailers, retail media has captured marketers’ attention in recent years, with Amazon pioneering the concept in the digital space.

Amazon was the first to open retail media to brands that aren’t selling on its platform, known as non-endemic brands. For example, if a consumer searches for ski gear on Amazon, an ad offering cheap airline tickets to a ski destination might pop up. Walmart has also capitalized on non-endemic advertising through its Connect retail media business.

Forecasts predict retail media will reach $82 billion in ad revenue by 2028, accounting for approximately one-fifth of the total ad spend.

Wieser is also optimistic about retail media growth, driven by social commerce’s rapid growth. Social media is the place that allows brands to balance between entertaining and selling. Out of all social media platforms, research company GWI reveals that Instagram is now the world’s favorite.

DataReportal’s Digital 2024 report also suggests advertising across multiple media channels delivers the best results. Consumers want to be “entertained, stimulated, inspired, and feel a sense of connection,” indicating that marketers should prioritize satisfying these factors rather than focus on where their audience is consuming the media.

EMARKETER’s forecast suggests US marketers will spend $8.14 million on sponsored content on social media in 2024, up 16% from last year. The market research company predicts marketers will direct their budgets to larger creators with whom they can work long-term and extend these partnerships beyond social media to platforms like TV.