GroupM, the media investment arm of WPP, has adjusted its predictions for the role of artificial intelligence in the advertising industry. The organization now anticipates that more than two-thirds, specifically 69.5%, of advertising revenue will be driven by AI by 2024. This shift is a result of the significant investments being made in AI technology.
The focus of AI in advertising will primarily be on ad buying and optimization across digital channels, particularly in areas such as search. GroupM is confident that these digital channels will be fully AI-enabled by the end of this year. However, the impact of AI on ad production is not included in these calculations.
Looking ahead, GroupM forecasts that over 90% of ad buying will be powered by AI by 2029, which is three years earlier than previously predicted. This projection takes into account established technologies like machine learning and recommendation algorithms, as well as emerging generative AI technologies.
Kate Scott-Dawkins, the global president of business intelligence at GroupM, highlighted the rapid growth of AI tools in the advertising industry during a recent press briefing. She emphasized that AI is being incorporated into advertising strategies at an unprecedented pace, making it one of the most pervasive industries to adopt AI technologies.
One of the key trends identified by GroupM is the increasing role of machine-generated content in advertising. The organization estimates that by 2024, 1.6% of total ad-supported content will be generated by machines, a figure that is projected to rise to 10.7% by 2029. This shift includes various content formats such as audio, film, print, social media, and TV, and is expected to challenge the dominance of professionally produced content.
In addition to AI-driven content, GroupM’s mid-year update also included revised forecasts for global ad revenue growth. The organization now predicts a 7.8% increase in global ad revenue to reach $989.8 billion by 2024, a significant uptick from its previous forecast of 5.3% growth. This growth trajectory is expected to propel the global ad industry past the trillion-dollar mark in revenue by 2025, a year earlier than initially projected.
China emerged as a key driver of the positive outlook for 2024, with a projected 14% growth in ad revenue to $199.4 billion. The U.S. is also expected to see better-than-expected growth, with ad revenue forecasted to increase by 5.8% to $365.9 billion, excluding political advertising.
Overall, GroupM’s outlook indicates a positive trend in ad revenue growth across various global markets. Brazil, for instance, saw a significant increase in predicted ad growth rate from 5.3% to 11.3% for 2024. Similarly, Japan, the U.K., Germany, France, and Australia experienced marginal growth improvements. Canada’s growth is expected to remain steady at 5.7%, while India was the only market to experience a downgrade in growth forecast from 12.1% to 9.5%.
These projections underscore the significant impact that AI technologies are expected to have on the advertising landscape in the coming years, reshaping how ads are bought, optimized, and produced across various digital platforms and channels.