Geopolitical tensions darken forecast for digital advertising
The European digital advertising market achieved double-digit growth last year surpassing €118.9 billion in annual revenue for the first time in constant currency terms. The forecast for 2025 is less optimistic referring to macroeconomic uncertainty and geopolitical tension, according to advertising organisation IAB Europe’s benchmark report.
Despite macroeconomic uncertainty in 2022, the European digital advertising market rebounded strongly in Q4 of 2023, continuing this trajectory into 2024. The latest data shows double-digit growth of 16%, the report says.
“While 2024 shaped up to be another healthy year, early forecasts for 2025 suggest a renewed period of volatility and that the ‘rollercoaster’ may be restarting”, says Daniel Knapp, chief economist at IAB Europe.
“Driven by macroeconomic uncertainty and geopolitical tensions, including the impact of new EU tariffs, advertisers are likely to adopt a cautious, ‘wait-and-see’ approach, prioritising measurable outcomes and performance over broad experimentation.”
The report, comprising 30 national markets, says 2024 shows the strongest growth recorded since 2011, with the exception of 2021’s digital bonanza in the wake of the COVID-19 pandemic.
Key findings:
- Social emerged as one of the strongest-performing channels at 23.9%.
- Both video and retail media emerged as key growth drivers in 2024, fuelled by changing consumer habits and evolving media consumption. Retail Media showed double-digit growth at 22.2%, while Video led the Display category with a 24.5% increase, largely driven by growth in Connected TV formats, including SVOD and BVOD.
- Video also accounted for over 50% of Display advertising in nine markets.
- While digital audio remains an area of interest, growth in 2024 was more modest at 18.3%, largely due to continued issues with scale and measurement, the report says.
- Programmatic also saw a resurgence in 2024, seeing 18.4% growth.
- Almost two-thirds of all advertising spend in Europe is now digital (67.2%)
- 21 out of 30 markets grew double-digit in 2024.
- UK is one of the top growth markets, reaching almost €42bn
- Ukraine (27.2%) and Serbia (24.8%) saw standout growth reflecting ongoing digital acceleration and increased advertiser confidence in smaller regions, according to the report.
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