Commerce Media Set to Eclipse TV Advertising as Digital Dominates

Global advertising spending is undergoing a seismic shift, with commerce media poised to overtake traditional television ad spend as early as next year. This transition underscores the accelerating dominance of digital channels, now accounting for 84% of the global advertising market, according to a new forecast from WPP Media. The findings signal a fundamental restructuring of how brands allocate marketing budgets and reach consumers.

The Rise of ‘Performance’ Advertising

WPP Media’s “This Year Next Year 2025 End-of-Year Forecast” projects commerce media revenue will reach $178.2 billion in 2025, surpassing the $171.1 billion expected for global television advertising. This growth is fueled by the increasing demand for advertising that delivers measurable results. Commerce media – advertising directly tied to sales within retail environments, both online and increasingly in-store – offers brands a clear return on investment, a key advantage in an era of economic uncertainty.

“Commerce media is becoming very, very attractive to brands because it’s both performance-driven and measurable,” explained Kate Scott-Dawkins, global president of business intelligence at WPP Media. “The ability to directly correlate ad spend with sales is incredibly powerful, especially when marketers are under pressure to demonstrate value.” This trend reflects a broader industry shift towards accountability and data-driven decision-making.

Search Remains Resilient, But AI Looms

Despite the burgeoning popularity of AI-powered search, traditional search advertising remains remarkably robust. WPP anticipates global search spend to reach $244.9 billion in 2025, representing a 10.2% year-over-year increase, with similar growth projected for 2026. This resilience is echoed by findings from Madison & Wall, which found search budgets “largely insulated from AI-related disruption.”

However, the composition of search is evolving. While traditional keyword-based search isn’t diminishing, AI-driven models are gradually gaining traction. Scott-Dawkins predicts mid-to-high single-digit growth for traditional search throughout the decade, but acknowledges the increasing influence of AI. WPP Media plans to begin separately reporting AI search revenue within its “intelligence” category starting in 2026, reflecting the growing ad offerings from platforms like OpenAI and integrated AI features within existing search products.

The current situation suggests that AI is currently altering *how* consumers discover products faster than it’s changing *where* marketers spend their advertising dollars. This lag highlights the cautious approach many brands are taking as they assess the long-term impact of AI on search advertising.

Upgraded Forecasts Reflect Economic Strength

Both WPP Media and Madison & Wall have revised their advertising spend forecasts upwards, signaling a stronger-than-expected global ad market. WPP now projects global advertising revenue growth of 8.8% in 2025, a significant increase from its June forecast of 6%. Ad spend is expected to slow to 7.1% in 2026, but still surpass $1.2 trillion. Madison & Wall, meanwhile, forecasts 11% U.S. ad spend growth in 2025, excluding political advertising – a substantial jump from its earlier 3.6% projection. This surge follows a 13% year-over-year increase in Q3, the fastest pace since early 2022.

Scott-Dawkins attributes the optimistic outlook to resilient consumer spending, despite ongoing tariffs and trade tensions, and the rapid expansion of the artificial intelligence sector. “Some of the biggest companies in the world sell advertising,” she stated. “It is important to the economy. It is important to funding this AI revolution.”

Navigating the AI Advertising Landscape

The advertising industry is at a critical juncture, transitioning into what Scott-Dawkins describes as “the cusp of the AI era.” Platforms that previously relied on machine learning are now heavily investing in AI infrastructure and tools specifically designed to enhance ad products. This investment is already yielding efficiencies in workflows, supply chains, and product development, potentially freeing up additional budget for media spending.

Madison & Wall’s data indicates a growing consolidation around AI-enabled media buying platforms, such as Meta’s Advantage+ and Google’s Performance Max. These platforms bundle creative development, optimization, and measurement into a “black box” system, offering convenience but potentially reducing transparency for advertisers.

To assist clients in navigating this evolving landscape, WPP Media has launched a Future of Advertising Intelligence Framework. This framework assesses companies across five key areas: data assets, AI and technical capabilities, distribution, transaction capabilities, and content and media. The full scoring and rubric, including evaluations of current platforms and anticipated entrants like OpenAI, will be unveiled at the Consumer Electronics Show (CES) in January 2026.

The global advertising market is projected to reach $777.8 billion in 2024, according to Statista, demonstrating the sheer scale of the industry and the importance of understanding these shifting dynamics. This represents a 4.4% increase from the previous year, highlighting the continued growth despite global economic headwinds. The ongoing evolution of advertising, driven by technological advancements and changing consumer behavior, presents both challenges and opportunities for businesses across all sectors.