APAC ad spend growth cools as global market tops $1 trillion: WARC

While the global advertising market is poised for a record-breaking year, the Asia Pacific region is experiencing a slowdown in ad spend growth, according to the latest report from marketing effectiveness analysis firm, WARC.

The report projects global ad spend to surge by 10.5% this year, reaching an unprecedented $1.07 trillion. However, the APAC region, while commanding a $272 billion market share, will see growth cool to just 2% in 2024. A strengthening US dollar and China's economic sluggishness are creating headwinds for the region.

"China—APAC’s largest market—is projected to see ad market growth of 6.4% this year to RMB1.32trn ($181.2 billion), an easing from the 9.3% rise recorded in 2023 as consumer demand remains soft and economic expansion lags stubbornly behind the target," states the WARC report.

This slowdown contrasts sharply with North America, projected to be the fastest-growing region this year with an 8.6% increase in ad spend, fuelled by the US presidential elections. Europe is also on track for a healthy 5% growth in ad investment.

The report highlights the continued dominance of tech giants Meta, Amazon, and Alphabet, which are expected to capture a staggering 43.6% of all global ad spend in 2024 (expected to rise to 46% in 2026). This dominance comes on the back of the rise of retail media (8.2%), social media (10.5%), and search advertising, sectors where these companies hold significant market share.

Meta, Google and Amazon: set for 43.6% share of adspend in 2024 (Meta and Amazon. Photo: Designed by AI

The report suggests that the increasing adoption of AI-driven ad services and the value of first-party data are contributing to the success of these platforms.

As James McDonald, director of data, Intelligence, and Forecasting at WARC, notes: "The global ad market has doubled in size over the last decade, with advertising investment growing almost three times faster than economic output since 2014. Three companies, Alphabet, Amazon and Meta, have been the largest beneficiaries from this period of expansion, attracting seven in ten incremental ad dollars over the last ten years.

"With retail media expected to lead ad spend growth over the coming years… we are once again seeing the value of first-party data in targeting the right person with the right message at the right time."

China loses steam, India ignites, Japan battles currency headwinds

As the global ad market barrels towards a trillion-dollar milestone, the battle for dominance in the Asia-Pacific region is just heating up. The WARC report paints a complex picture of the APAC advertising landscape, one where rapid growth in emerging markets contrasts with the challenges faced by established players. 

India is a stark contrast to the China story. The market is firing on all cylinders. Excluding currency fluctuations, India emerges as the region's fastest-growing market, with ad spend projected to skyrocket by 11.9% to $12.8 billion (INR1.08 trillion).

Meanwhile, Japan, the world's fourth-largest ad market, grapples with a weakening yen. While ad spend in local currency is forecasted to grow by 5.2% to $36.9 billion (JPY5.83 trillion), the yen's tumble to a decade-long low translates to a 6.3% decline in US dollar terms.

The report also highlights the struggles of mature markets like Australia, where ad spend is expected to expand by a modest 2% following a practically stagnant 2023. Indonesia offers a glimmer of hope, with a projected growth rate of 7.8%.

Despite the regional disparities, the dominance of digital advertising remains absolute. In China, online advertising is expected to account for a staggering 86% of the market, although the growth of social media and retail media advertising is slowing.