Global advertising spend is set to increase by 10.5% this year to $1.07trn (£820bn), marking the first time that it will exceed $1trn.

According to new predictions from WARC’s global advertising spend outlook for 2024/25, spend for 2025 is set to rise by 7.2%, followed by a further 7% boost in 2026.

Global ad investment has more than doubled over the last decade, with Meta, Amazon and Alphabet accounting for more than 70% of this incremental spend. The three groups are expected to attract 43.6% of all advertising spend in 2024, rising to a share of more than 46% by 2026.

The ad market in North America is expected to grow by 8.6% this year, with US political spending alone set to reach $15.8bn (£12.05bn) due to the presidential election race.

Growth in APAC will cool to 2%, Europe will grow by 5% to $165bn (£126bn), Latin America will see a 6.2% boost, and spend in the Middle East will grow by 4.2%, largely unaffected by the threat of looming conflict.

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Retail media (21.3%), social media (14.2%), and search (12.1%) will drive digital growth this year, together accounting for 85% of online spend and nearly $3 out of every $5 of incremental advertising spend this year.

“The global ad market has doubled in size over the last decade, with advertising investment growing almost three times faster than economic output since 2014. Three companies – Alphabet, Amazon and Meta – have been the largest beneficiaries from this period of expansion, attracting seven in ten incremental ad dollars over the last 10 years,” says WARC director of data, intelligence and forecasting James McDonald.

“With retail media expected to lead ad spend growth over the coming years, and with new, diverse players emerging in ad selling – from Uber to Chase – we are once again seeing the value of first-party data in targeting the right person with the right message at the right time. Such data, combined with new AI enhancements, will constitute the fabric of the advertising industry for the next decade and beyond.”

The figures come from a decade of consolidation, a new study that includes a 2.3 percentage point upgrade to WARC’s forecast to reflect the growing uptake of AI-enabled media tools. The analysis is based on advertising spend data from 100 markets and projections of ad investment patterns based on more than 2 million data points.

Marketing effectiveness specialist WARC has introduced a new neural network machine learning model for its latest research, which it believes to offer the most comprehensive market model currently available.