Outlook of GroupM, an International Media Investment Group
Global advertising revenue is predicted to surpass $1 trillion (1,378 trillion won) next year. This figure is one year earlier than initially expected.
On the 11th, Yonhap News reported citing the Wall Street Journal (WSJ) and a report from the international media investment group GroupM. According to the report, excluding political advertising in the United States, global advertising revenue this year is expected to grow by 7.8% to about $990 billion (1,364 trillion won). The previous growth estimate was 5.3%. Next year's advertising revenue is estimated to reach $1.1 trillion (1,515.6 trillion won).
Earlier, in December last year, GroupM released a report stating that "this year's advertising market revenue could be negatively affected by high interest rates burdening consumer and corporate spending and sluggish growth of Chinese companies." However, it added, "Contrary to expectations, the economic situation improved, and differences in modeling certain sectors changed the outlook." GroupM's forecast for U.S. advertising revenue this year is $365.9 billion (504 trillion won), excluding political advertising.
China's advertising revenue this year is expected to be $199.4 billion (274.7 trillion won), up from the previous estimate of $148.2 billion (204.2 trillion won).
The author of this report, Kate Scott Dawkins (President of GroupM Business Intelligence), said, "Most of this increase in China stems from GroupM changing the way it models outdoor and digital advertising."
They analyzed that by partially changing the method of calculating digital advertising, they better captured commerce currently conducted digitally.
They also noted that 69.5% of this year's advertising revenue can be characterized as related to artificial intelligence (AI). GroupM stated, "This will expand to 94.1% by 2029." Scott Dawkins said, "There is probably no other industry where AI is as integrated and directly impacts revenue as the advertising industry."
The NVIDIA headquarters building located in Santa Clara, California, USA. (This photo is not directly related to the article.) [Photo by AP Yonhap News]
In this regard, WSJ reported, "This shows how much advertising revenue will go to companies that heavily use AI tools, such as Google, Meta (Facebook's parent company), and ByteDance (TikTok's parent company)."
Meanwhile, governments worldwide are increasing investments to secure AI technology leadership. Singapore is considered the country investing the most to protect ‘AI sovereignty.’
Earlier, WSJ reported, "Singapore is upgrading its National Supercomputing Center with Nvidia's latest AI chips, and Singapore's state-owned telecom company Singtel is collaborating with Nvidia to expand data centers in Southeast Asia." Canada decided last month to invest $1.5 billion (about 2 trillion won) as part of its national computing strategy for startups and developers. Japan announced it will invest about $740 million (about 1 trillion won) this year to strengthen AI computing capabilities.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
