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Digital ad spend is plateauing, with growth rates slowing considerably between now and 2028, especially when compared to the boom times such as the immediate post-pandemic era.
EMarketer research further predicted the days of double-digit growth rates will soon be over with year-on-year growth to be just 8.7% in 2028 — compared that to the market conditions of 10 years earlier when growth was consistently above 20%.
There are various causes behind these declines, with uncertainty caused by macroeconomic machinations, the emergence of disruptive tech platforms, i.e., ChatGPT, etc., and digital media saturation. For example, the year-on-year growth of time spent with digital media will be just 2% this year, according to eMarketer’s researchers.
In a June 17 presentation, conducted in New York City, eMarketer’s chief content officer Zia Daniell Wigder offered insights on how attendees could recession-proof their strategies in a shifting economy and times of economic uncertainty.
She began by noting how uncertainty has been the one constant in the media sector over the last decade, citing ongoing sagas such as the fate of third-party cookies, and slowing growth rates.
“What this means is that it’s gotten a little more challenging for digital teams to get the budget for all their initiatives when they’re no longer growing at much faster rates than their physical counterparts,” said Wigder, noting the plateauing growth of e-commerce.
Commenting on declining growth rates on social media platforms, she also noted a “zero-sum game era in which one platform’s gains are another platform’s loss… while these things don’t make headlines… they’re going to have a very big impact in terms of how markets are developing.”
AI search ad spend to pass $25 billion this decade
One of the disruptive elements of the current era has been the emergence of agentic AI platforms and LLMs, with trade bodies citing the issue as their number one priority this year, and publishers particularly scratching their heads on how to monetize in this environment.
AI search ad spent will continue to remain a small proportion of total search ad spend this decade, representing 0.7% this year, although that will increase to 13.6% by the close of the decade.
“Despite all the talk about it, it’s going to take a while to really evolve,” noted Wigder, “a lot of the platforms are still working on exactly what their ad businesses will look like, and measurement is certainly not there, so, it’s still early days.”
Describing retail media as “the third big wave of digital advertising” eMarketer’s content chief later went on to note how such platforms have had the highest growth trajectory in terms of their popularity with advertisers. That’s even if some marketers interpreted the rise of retail media networks as an extra levy in their cost of doing business.
Emarketer’s forecasters predict its notable early growth rates will continue, even with the threat of tariffs from the current U.S. administration, with Wigder noting how its share of ad spend eclipsed that search or social media. In fact eMarketer’s team believes that in a worst case scenario, retail media ad spend will by just shy of $56 billion this year, or near $61 billion if “limited tariffs” are eventually imposed.
“It took search about 14 years to go from zero to 30 billion in ad spend took social about 11 years, and it took retail media five years to go through that growth period, and we’re seeing the same thing here, but the big difference is, if you looked at retail media, there’s much more linear growth.”
E-commerce is resilient, but AI will uproot discovery
EMarketer forecasts that e-commerce sales will grow by 5%, that’s if there is a moderate rates of tariffs imposed on non-U.S. manufactured goods, with the impact on sales likely to be sector-dependent.
However, Wigder said that retailers will more likely have to consider how AI will change how consumers discover goods, information or services online, adding that few businesses “have that nailed.”
“This is the idea of agentic AI that everyone is talking about if you look at what the shopping journey looks like right now, it is a whole lot of back and forth,” she said noting that marketers taking lower price-point items to market are most likely to be impacted by this growing consumer trend. “But you’re not going to do this [program an AI agent to make a purchase on your behalf] for a car, right?”
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