Global ad spend is set to grow 8.8% this year, according to WPP Media’s This Year Next Year forecast — a sharp upgrade from the 6% that it was predicting mid-year.
The improved outlook is due to two factors, say analysts at the agency. First, the expected drag from US tariffs never materialised. Many manufacturers absorbed more of the costs than anticipated, with some rapidly shifting supply chains to minimise the cost hike. And, even when prices did increase, most consumers simply kept spending.
Second, the AI boom has begun feeding directly into the ad market. Investment in AI infrastructure is lifting overall economic activity, companies are reinvesting efficiencies back into marketing and the AI companies themselves have started spending some of their booty on advertising.
So, what was poised to be a struggle has turned into an unusually strong year. It was a year defined by shifting channel dynamics. Arguably the biggest story from the report was that commerce media — composed of retail, travel and financial services media channels — overtook television in ad spend.
Kate Scott-Dawkins, global president of business intelligence at WPP Media, said: ‘This is the first year globally where commerce media will be larger than total TV advertising, and that’s a pretty big shift.’
WPP Media predicts that commerce media ad spend will reach £178.2bn this year, making up 15.6% of global ad spend, compared with 14.6% for linear and connected TV. The projected spend underscores the explosive ascendency of the channel, which has repositioned retailers as formidable media owners and created a new ecosystem.
But Scott-Dawkins argues commerce media’s expansion may have already peaked. ‘We are now at a point where we’ve gone through the proliferation phase of media networks and we’re probably now entering more of a consolidation phase.’
Dozens of retailer-owned ad networks emerged over the past five years, but only a fraction will have the scale, technology or depth of first-party data to compete.
AI is accelerating the consolidation, Scott-Dawkins said: ‘If product discovery starts in an LLM, not on a retailer’s site, then the value of that retailer’s ad inventory diminishes.
It may take some time for the full effects of AI search to hit commerce media, but retailers are already pursuing two opposing strategies to head off the disruption. Some are partnering with AI companies, allowing their inventory to be surfaced in chatbot results in exchange for visibility. Others are shutting out LLMs entirely, trying to maintain control of the customer relationship and the retail media revenue tied to it.
Scott-Dawkins noted that partnering with chatbots means companies ‘lose the opportunity for retail media on their sites’, but only retailers with the size and dominance of an Amazon or a Walmart can afford to refuse LLM access outright.
While retailers grapple with AI, they must also deal with a more fundamental question. As Scott-Dawkins put it: ‘Is it actually an incremental sale? Is it actually someone who’s new to brand or new to product or whatever else? Or is it just that they clicked on it and they were going to buy anyway?’ Incrementality remains the hardest proof point and may become even harder to demonstrate as chatbots reshape the path to purchase
TV, for its part, still demonstrates ‘remarkable stability’ as a medium, according to WPP. Total TV ad spend grew by 0.6% to reach $167.4bn in 2025, and is projected to grow a further 2.1% next year. As Scott-Dawkins said, audiences are still spending time with the ‘big screen’ — just not in the same way. Traditional linear viewing continues its structural decline (down 3.8% this year) across all major markets, but that loss is being offset by the steady rise of streaming TV (+15.2%).
The problem is that streaming’s economics aren’t equivalent to those of linear, and the rise of streaming is simply ‘not enough’ to offset losses of more than a fifth in the category. ‘It’s a kind of managed decline/flattish growth for the category as a whole. People are still spending time with the medium but the changing economics mean that we’re not seeing the kind of growth we are at an advertising industry level.’
Sport is one of the last true growth drivers. Nidhi Shah, global business intelligence analyst at WPP Media, pointed to the World Cup and Winter Olympics next year as major stabilising forces, saying these events still deliver the kind of mass, simultaneous attention that brands struggle to find elsewhere.
Overall, 2025 has been a turbulent year. But Scott-Dawkins believes that advertisers have shown ‘remarkable resilience and perseverance’ to push through. Indeed, disruption itself may be one of the elements which drove the strong performance WPP’s data shows for the last year.
‘Uncertainty isn’t always a bad thing for advertising,’ Scott-Dawkins pointed out. ‘I guess advertisers have sort of gotten used to and are much better at dealing with uncertainty and economic uncertainty now, I believe, than they were pre-COVID.’
‘I think they’ve also been very quick to understand the potential scale of impacts from AI and asking themselves, “What are we doing today? What can we do with assets we have today?”
‘There’s been a real sense of urgency and action really around the broader topic of AI and making sure that brands remain discoverable and top of mind and salient to consumers in this new world. So I think they have actually done a remarkably good job, given everything that was going on in 2025.’
Main image by Steven Lelham on Unsplashed
