Ad revenues grew 8.8% in 2025 as analysts grapple with ‘the era of AI advertising’

Then Donald Trump’s second term as president began, bringing with it a whole new modus operandi in US trade policy that, we all worried, would destabilize everything. Amid tariff chaos, WPP Media was in good company: it, Warc, and the then- IPG Mediabrands intelligence unit Magna all downgraded their 2025 growth forecasts.

By the time of its official mid-year update, WPP was settling on a more modest 6% projected growth rate for the year, with report author Kate Scott-Dawkins (WPP Media’s global president, of business intelligence) saying that all the turmoil made for “the hardest forecast to wrap my head around out of all the ones I’ve done”.

But now, as WPP releases this year’s edition of the report, it puts a surprisingly high number on the growth rate for the year behind us: 8.8% – far higher than that mid-year update predicted, and higher even than the rate predicted 12 months ago, before Trump resumed his seat in the White House.

As for 2026, the report predicts a 7.1% global growth rate, bringing total revenues to over $1.2tn. With the US and UK sitting around that global average at growth rates of 7.4% and 7% respectively and the rest of Europe lagging (France: 4.9%; Germany 3.6%), that growth is concentrated in a few particularly surging markets: Canada at 8.8%, India at 9.7%, and Brazil, the world’s fastest-growing advertising economy, at 14.4%.

Growing pains?

That surprisingly salutary growth, Scott-Dawkins tells The Drum today, comes down to a few factors: the investment AI boom, increased resilience of marketers to geopolitical factors, and the sheer penetration of the marketing business into the core of the world’s leading economies.

First, AI: A world-shaking development this year that Scott-Dawkins says is “an element of the world economy is in a unique position to take advantage of,” thanks to existing AI tech and expertise in the business. AI, Scott-Dawkins says, grows ad revenues in a few inter-reinforcing ways – as a driver of overall GDP growth, growing companies, and leading to greater investment in AI (and marketing); as a driver of efficiency, allowing for greater reinvestment in operating expenses like marketing; and by creating whole new categories in the economy that themselves demand marketing services (in an increasingly crowded marketplace).

Second, resilience. “It’s a muscle that is just stronger in advertisers now,” says Scott-Dawkins. “We understand that there are geopolitical conflicts and economic uncertainties that are going to happen and are going to keep happening, either as a result of globalization, which means that our economic systems are more attached than they were in previous decades and centuries, or because of the current political climate and polarization or whatever. But [marketers] will persevere through that, and they’ve discovered that that’s better than the alternative of trying to stop everything and then start it again”.

Third, the centrality of marketing. It’s no secret that marketing revenues are increasingly concentrated in the hands of a relatively small number of players – especially the ‘big 4’ of Google, Meta, Amazon and Microsoft. And it’s no coincidence that these are among the most valuable and biggest-spending organizations in (the history of) the world. In short, marketing is becoming, every year, more and more central to the world economy, Scott-Dawkins says. “The largest companies by market cap are sellers of advertising, and so there is a sense that this is a key function of the global economy, and that, therefore, it makes sense that it will continue as sort of a drum beat, as it were, in spite of or alongside everything that is happening in the world.”

Where are the revenues going?

The macro trend to end all macro trends in media revenues shows no sign of slowing: in 2026, a yet greater share of ad dollars will go to digital channels, raking in 83.7% of all revenues.

Much of that will go to the aforementioned big four, with the likes of Amazon and Meta sustaining seemngly miraculous ad revenue growth figures around the 20% mark for successive quarters.

As the agency world entered consolidation mode this year, so did the wider marketing ecosystem agencies exist to serve, with increasing revenue concentration and pressures toward mergers for media owners looking to compete with those dominant global platforms. According to the report, while the top 350 advertisers in the world account for less than 25% of revenues, the top 25 media sellers accounts for more than 70%.

Other channels are getting savvier in the new AI market, too: take Reddit, which posted 74% ad revenue increases in Q3 of this year (albeit starting from a lower baseline from those competitors), hitting $3bn for the time, buoyed by its increased use in the AI search paradigm.

Speaking of search, the channel grew its share of the overall revenue pie this year, making up 21.4% of total revenues (21.4%).

Social media revenues in toto grew 12.8% this year, to $413bn, growing the channel's share of total ad revenue from 34.8% in 2024 to 36.1%.

Elsewhere, commerce media is also surging, making up 15.6% of total ad revenues ($178.2bn) this year, surpassing TV for the first time. As the industry’s gold rush on commerce media continues, particular growth areas include travel media, which grew 22.9% this year, raking in $3.3bn.

TV, meanwhile, is seeing declines of total ad revenue shares (to 14.6% this year and a projected 13.9% next), while streaming continues to increase its share of the total TV pie.

What does media (and forecasting) look like in the ‘AI era of advertising’

Forecasting growth for something as complicated as the global advertising ecosystem is never straightforward; that complexity is compounded by the unknown unknowns of just how transformative the next stage of the AI revolution could be for almost every aspect of the business.

As such, WPP announced with the launch of its report today a stream of work it’s calling ‘The Future of Advertising Intelligence’ in which it will be grappling with the multiverse of AI-overhauled futures for the industry.

Thinking what that transformation might look like can start with looking at the penetration of AI tools into our personal and professional lives already, Scott-Dawkins says. “Its efficacy and its usefulness for me and my role has dramatically improved even in the last six months,” she says. “We are moving to a position where people are going to rely on these tools more and more often. I don’t know exactly how that's going to turn out. How will that be monetized? There might be people who pay for versions that are less commercialized versus the majority of people who pay with their attention in time, similar to TV, potentially[...] And then you are in a future where the companies that have these models are important; the ways that you access the world around you are important; and I continue to think the hardware piece of things is going to be extremely important.”

These dynamics become concrete in the case of leading AI players like OpenAI, the organization behind ChatGPT that completed its transition to being a for-profit company last month, opening up a route to fresh commercialization and, many expect, an ad business. But for near-term forecasting, Scott-Dawkins says, it’s important to remember that these things take time: systems must be built, and relationships with advertisers formed. “Look at Netflix rolling out ads: people thought, when it first launched, that Netflix is this huge media company, so ads are going to be mastered for them right away. Well, no, it took a while, because they were starting from scratch.”

But it’s not just OpenAI; almost every one of the world’s top companies has thrown its hat in the ring in the AI race, and possible advertising futures bloom from all of those efforts in an almost infinite spread of possibilities. How does a forecaster pick their way through that complex, often closed-off world?

“Well, that's why I don’t sleep,” says Scott-Dawkins.