WPP Media’s This Year Next Year report has become a key signpost in the global marketing calendar – an exhaustive examination of annual adspend across markets, revealing both country-level quirks and global, tectonic trends.
Its biggest bombshell this year was that commerce-driven advertising will hit $178bn in 2025, overtaking total TV ad revenue for the first time.
Powered by the rise of retail media and fuelled by advertisers’ hunger for closed-loop measurement and first-party data, the shift marks a profound tipping point for the industry.
Performance Marketing World sat down with Kate Scott-Dawkins, president, global business intelligence at WPP Media, and one of the key authors of the report, to discuss a social media slowdown, AI’s incoming impact of search and how just 25% of media sellers now account for 70% of total industry revenue.
Q. WPP’s This Year Next Year has become a major barometer of the industry. As a spearhead of the project, what has changed over the years?
We never want to sit still. When I took over a couple of years ago, we added retail media for the first time. We viewed it as an important trend and felt it was important to size that market. We were the first in the industry to put a number on it, which was then adopted and used everywhere.
Last year, we introduced new categorisations because we felt it was less helpful to talk about digital as this big, monolithic thing. Everything is becoming more digital. If we used the broadest definition of digital, it would be at 84%; that is not a helpful distinction.
We wanted to talk about advertiser motivation instead, which is why we shifted to the idea of content-driven advertising, intelligence, commerce, and location. That has really evolved into much of the new content and thinking within intelligence this year. It is always an evolution, but there is a through line: trying to understand and predict where the market is headed and what advertisers need to understand to succeed in that new world. That has driven the changes we have made in every single edition.
Q. This Year Next Year 2025 puts global adspend growth at 8.8%. The IMF (International Monetary Fund) predicts the global economy will only grow by around 3% in the same time period. Why is advertising becoming such an outperformer on the global stage?
We always compare advertising growth to a nominal GDP figure rather than real GDP growth, because our numbers do not correct for inflation. We want to ensure we are looking at apples to apples.
Even with that consideration, US advertising is going to outpace GDP growth this year and next. That is a theme we are seeing across multiple markets, not all, but multiple. There is an understanding that advertising does lead to growth, revenue, and users.
Q. Does the increasing globalisation of digital marketing make it hard to measure the effect of specific countries?
We can’t break it down market by market because the cross-border nature of advertising has shifted fundamentally in recent years. For example, we heard Meta last year saying 10% of revenue came from China; they do not have any users in China! That is all revenue coming from advertisers in China to overseas markets.
This raises a huge global question. We are seeing companies like Temu and Shein adding to growth in markets like Brazil, South Asia, and Europe, as well as Chinese car manufacturers (OEMs) advertising on TV and sports sponsorships around the globe.
On the flip side, advertising is a key component of revenue for most of the largest companies in the world, or at least several of the top 10. Alphabet, Amazon, Apple and Microsoft all sell advertising as a key business component, and increasingly partially to subsidise services for consumers.
When we look at how AI is shifting the landscape, perhaps that becomes a format and an element that increases in future years.
Q. In terms of breaking down to new categories, you decided to measure commerce media more broadly, rather than just retail media. Can you explain that decision?
Yes, retail is still a component of commerce, so it is within the commerce category. Commerce is the new umbrella category because we have now added travel, travel services, financial networks, and retail networks. It will surpass TV this year, but commerce is more broadly a category of ad sellers who are tying media exposure to purchase.
Q. What is the key driver of the rise of commerce media around the world?
Certainly, the promise of better results – being able to attribute media to sales. We have seen a shift over recent years from other digital categories, or from content-driven categories, into retail and commerce.
Looking forward, commerce media is under pressure from AI, as purchase journeys potentially start increasingly on chatbots and places like Gemini, Claude, Grok, or ChatGPT. There has been early research done on how many of those types of journeys increased around Black Friday in the US.
What happened is there was a huge proliferation of retail media networks over the last several years. Everyone thought, ‘This is a great, high-margin revenue driver. We are going to add a media network!’ As is often the case, scale will be a benefit. The largest organisations will still be able to get people to come to their site and start a search for a product there, unlike some of the smaller ones.
We’re already starting to see more partnerships with companies like OpenAI, where they are going to take those incremental sales from the distribution push via those chatbots. But it may lead to less retail media revenue from people actually on their site seeing on-site inventory. That can be a major shift for that category going forward.
Q. In terms of search and AI, you bracket them together in a category called 'intelligence' in this year’s report. Can you explain why?
This year's revenue from AI is insignificant, so we have not broken it out, but I think that is going to be a bigger feature next year. Even traditional search, as we measure it today, is still growing better than 10% this year and next year.
There is a lot of interest in that category and use cases. All these new companies selling products and services are still using the search playbook, but increasingly we are expanding into other types of intelligence advertising.
Q. AI is the dominant subject in adland – what do you think will be its biggest impact in 2026?
We are on the cusp of a new AI era of advertising. I would not call it a start because I would say the advertising industry, more than any other industry, has been a leading integrator and applicator of AI for the last decade. Companies like Google and Meta were using machine learning on their platforms a decade ago. We have already proven its use case.
As an industry, we are applying the next generation of that generative AI and some of those pieces, so it is going to continue to evolve. I think that is something marketers are increasingly good at after the shocks of recent years – investing through uncertainty and change.
Q. How will this change the industry over the next few years?
I do think advertising is going to start to look different. If we look a few years down the line, it is going to be increasingly personalised. That does not mean there are no brand campaigns. Brand campaigns are still important. Mass media is still important, but to the extent that you can make it more relevant and valuable to individuals, I think that will be important. I think it is going to be increasingly pervasive.
The companies that are able to offer multiple services, modes, formats, ways of interacting, places that they touch the consumer journey – that is going to be increasingly important. And it is going to be increasingly proactive.
Traditional search is primarily a reactive channel: someone comes to a browser or search bar and actively types in something they are seeking, then gets a response. We may see that shift to potentially companies providing value in moments that are less interruptive or more additive, if they understand more about what a consumer or an audience person would find valuable. The companies that can connect all those things and offer that beneficially, considering a two-sided network of advertising to both the audience and the advertiser, will be key.
That is one of the things we are really starting to explore in depth in this report with our Future of Advertising Intelligence Framework, and something we are going to be rolling out and talking about a lot more come January.
Q. There is quite a bold claim in this report about the deceleration of social media ad spend growth for 2026. Can you expand on that?
Two things are happening there. One is the astounding growth we saw from some of these companies this year, with Meta actually accelerating across the year at over 20% growth in each of the first three quarters of 2025. Fundamentally, by the numbers, that makes it a difficult comparable to beat at the same levels next year.
We are also starting to see and hear from a few markets, anecdotally or in studies, about waning consumption or time spent within social media. There have always been lawsuits and reports looking at the impacts of social media, but we are starting to get to things like the Australia ban on social media for under-16s. There are also states within the US that are looking at similar restrictions. This is not new, but advertisers are looking at how to make their plans for 2026 the most efficient and best possible.
They are also looking at places where they are spending efficiently, really getting incremental value out of that. I think they are looking at both commerce and social very closely as a result; what those platforms are providing is excellent.
Q. The report also identified gaming as the fastest-growing channel at $8.5 billion total adspend for next year, which is still significantly smaller than search, social, and commerce media. Is there ever a point when gaming could match other major channels?
There is a double-edged sword of reporting on gaming. We did not for a long time because of how small it is. I think it is useful now to state how big it is, which is relatively small, to be a helpful voice in the marketplace.
If you searched for in-game advertising revenue globally, you would get everything from $150 billion from some research companies to $2 billion or $17 billion. It is all over the place. It is very hard to measure, partially because it is so small. It is not a significant enough portion of revenue for a lot of these premium gaming companies to be something they split out.
We used to get some data from Activision Blizzard before they were sold to Microsoft. We now have some gaming reporting from Microsoft, but certainly not advertising split out from the rest. That was a very difficult thing to quantify, and it felt important to put a stake in the ground, a starting point from which to work.
Q. Do you think gaming is currently an under-served area in terms of adspend?
It has not scaled yet. A couple of things influence that. One is that much of what we see today tends to be mobile, casual, and involves a lot of app installs in some of those casual games. The ad experiences are not very good, which has been a limiting factor. The big, splashy things tend to be more premium but small, hard to scale, and take time. It is not the same kind of ease of programmatic buying that has helped scale many other digital assets.
It is important to discuss; it is still bigger than cinema, which we have reported on for a long time, so it felt like we could not ignore it.
But it is also not a monetisation method or engagement method that a lot of gamers, especially in those premium console and computer games, are familiar with or comfortable with yet. We have to see how that plays out. Roblox is there, but again, still very small.
Q. Warner Brothers is currently caught in a major $100bn bidding war with Netflix and Paramount. The report mentions a big shift from linear to streaming – what do you see as the future of connected TV ads and streaming ads?
Streaming TV is typically one of the fastest-growing channels in most markets we see. I expect that to continue.
It is particularly interesting that Netflix was once the disruptor here. Companies were trying to choose whether they should license to Netflix as this competitor or as an initial stream of revenue versus holding their content back.
Scale is increasingly viewed as important by all players, especially when you are competing against some of these larger tech platforms that have content in addition to cloud services they can monetise, in addition to commerce and all these other pieces. This includes the ones that are already globally scaled, like Warner Brothers Discovery or Netflix.
As we see these aspects shift and look at things like distribution and how important the operating system for a TV becomes, that is something I believe in quite strongly; that is going to be important. It is not something that Warner Brothers or Disney or Netflix have a stake in today. It is interesting to see their reverse role now, looking at these other AI-driven disruptors and what that can mean for them, and viewing scale as a potential route forward for better competition.
Q. The report identified market concentration of media sellers. It said the top 25 media sellers account for 70% of total industry revenue. Is that healthy for a media ecosystem?
I think some industries and parts of industries are even more concerned. 70% accounted for by 25 companies does feel like a lot, and I think it is going to increase in 2025. You may have some disruptors. Xiaomi is new on that list as of 2024.
If and when OpenAI introduces advertising, do they come onto that list? I do think there is still an element of competition and innovation. That is what I think is important for advertisers. As long as there is enough competition and innovation that companies are creating better opportunities for their advertisers and better opportunities for consumers, then I view that as a potential benefit.
