The Three Pillars that Formed the Marketing Landscape in 2024

The global advertising market in 2024 is particularly ‘hyped’ – according to a report by the marketing analysis agency WARC, global advertising expenditure in 2024 was increased by 10.7% to reach $1.08 trillion, marking the strongest growth rate in advertising budgets over the past six years.

There are many factors behind the strong growth. For example, 2024 is a year with an unusually high number of ‘big events,’ including internationally popular sports events like the Paris Olympics and the European Championship, as well as national elections in countries such as Mexico, India, and the United States. Additionally, the penetration of digital media advertising into more countries and regions has played a significant role.

How does the global advertising market maintain its confidence? In what directions are the leading international advertising platforms exploring and striving? What are the potential concerns behind the growth?

AI-Driven Advertising: From Exploration to Comprehensive Deployment

A Quantum Leap in AI Integration

If 2023 marked the experimental phase for AI applications by internet giants, 2024 saw a profound integration of AI into all facets of advertising marketing, transitioning from initial exploration to comprehensive deployment.

AI has deeply penetrated advertising marketing by 2024, moving from initial exploration to comprehensive deployment. It has enhanced search experiences, conversational ads, creative material production, data-driven precision decision-making, and marketing automation. AI’s transformative impact on the industry is undeniable, driving efficiency and effectiveness to new heights.

From Search to Conversational Ads: AI Enables Bidirectional Selection

At the Google I/O 2024 on May 15, 2024, Google introduced the ‘AI Overviews’ search experience, merging core search systems with large language models. Users now receive precise and comprehensive answers to their complete questions. For instance, asking “How to remove grass stains from jeans?” yields not only detailed solutions but also relevant shopping ads, like laundry product recommendations.

Google Lens, another example, handles 20 billion visual searches monthly, with one-fourth having commercial intent. Since October 2024, users can access detailed product information, including reviews and price comparisons.

Microsoft and Amazon also leverage conversational ads, displaying relevant sponsored ads during user interactions based on their needs and interests. This approach shortens the path from demand generation to product purchase.

Efficient Production of Creative Materials: AI Moves to the Forefront

AI’s role in content generation has transformed marketing. For example, Google’s video enhancement feature automatically creates various versions of existing videos, increasing content diversity. Their self-service voice-over feature supports over 12 languages, facilitating high-quality audio production too.

Meta’s Meta Advantage uses generative AI for video extensions and image animations, enhancing ad creativity. Snapchat combines machine learning and AI tools to optimize headlines and create custom brand filters.

At the 2024 IAB NewFronts digital marketing conference, Snap announced further application of machine learning to improve ad material production. These advancements show how AI has shifted from a ‘gimmick’ in 2023 to fundamentally transforming ad creation, distribution, and optimization in 2024.

Data-Driven Precision for Decision-Making: Unlocking the Value of First-Party Data

AI’s integration also enhances the value of first-party data, offering precise ad targeting by deeply analyzing users’ historical behavior. Microsoft, for instance, uses its vast data to provide deep user insights for advertisers. Its Ads Copilot monitors and analyzes ad performance in real-time, offering optimization suggestions.

Google builds detailed user profiles from multiple channels and predicts needs accurately, providing targeted ad placements. Their AI models achieve around 70% accuracy in assessing new creatives’ potential on key performance indicators.

AI-Powered Marketing Automation: Simultaneous Improvement in Effectiveness and Efficiency

AI-powered marketing automation manages and optimizes ad placements through automated processes and algorithms. Microsoft’s Performance Max ad format, covering almost all of Microsoft’s advertising resources, dynamically generates and optimizes ads across platforms.

The Rising Value and Evolving Approaches of Streaming Media Advertising

Prominence in Digital Lives

Streaming media has become a significant source of entertainment and information, particularly in Europe and North America, where CTV (Connected TV) and digital video household penetration rates are increasing.

Market Growth

According to GroupM, global CTV advertising revenue is projected to reach $38.3 billion in 2024, a 20% increase from 2023, and is expected to grow by another 20% in 2025, reaching $46 billion. Netflix plans to test their ad platform in Canada and launch it in the United States by mid-2025, with a global rollout by the end of 2025.

Business Opportunities and Innovative Models

Major streaming service providers are seizing the business opportunities by offering more ad support options and innovative models to enhance the advertising experience.

Types of Ads

• Targeted Ads and Embedded Ads: Amazon started embedding ads in Prime Video movies and TV shows in January 2024, and plans to add ‘shopping ads’ (e.g., carousel ads, pause ads) in 2025.
• Audience Preferences: According to LG AdSolutions, 80% of CTV viewers prefer ad-supported subscription services, and 69% prefer connected TV services with ads, recognizing the cost benefits.

Interactive Opportunities

Google expands main screen banner ads on Google TV and introduces branded QR codes on YouTube connected TV, allowing viewers to interact with ads through mobile phones for more information or purchases.

Integration with Sales Channels

Both Google and Amazon’s advertising strategies aim to shorten the consumer’s shopping path by integrating advertising channels with sales channels. Advertising departments are increasingly merging with sales and distribution departments, with ad campaigns more directly linked to performance metrics.

New Solutions for Protecting Data Privacy

As consumer awareness of data protection grows and regulatory scrutiny intensifies, data privacy protection has become crucial in advertising and marketing. Over the past five years, this topic has remained a focal point, with numerous laws and regulations being introduced and updated, such as the EU’s GDPR and the California CCPA. In 2024, new regulations like the ‘2024 Protecting Americans’ Data from Foreign Adversaries Act’ and CISA data security regulations emerged.

Digital privacy is multifaceted, with ongoing negotiations between platforms and regulatory agencies. For example, the EU’s Digital Markets Act requires Apple to allow competitors and app developers to interoperate with its services. This act aims to promote fair competition and innovation but has raised concerns about security and privacy risks, particularly between Apple and Meta.

Platform Rule Changes

In July 2024, Google decided to leave the choice of disabling third-party cookies in Chrome to users, due to the slow progress in transitioning to the new privacy sandbox platform. This decision reflects the balance between respecting user privacy and developing the advertising business.

Cloud-Based Data Privacy Protection

With the decline in the reliability of third-party data acquired through cookies, focusing on first-party data utilization has become inevitable. Cloud-based data privacy protection has emerged as a common solution. Google’s ‘Confidential Match’ uses a Trusted Execution Environment (TEE) to create a secure cloud-based ad transaction platform, helping match first-party data sets with browser data for precise targeting and measurement.

Similarly, Amazon launched the AMC Marketing Cloud in AWS Clean Rooms, enabling secure analysis and collaboration of aggregated data sets. Integration with LiveRamp allows secure activation of first-party and third-party users on Amazon DSP. These initiatives enhance data security, privacy, and ad effectiveness.

Challenges and Trust Issues

Despite new technologies and tools, data privacy protection still faces challenges, particularly trust issues. Data collection and sharing continue, but access rights are restricted. Enhancing mutual trust, especially gaining advertisers’ trust, is crucial for effective data sharing and utilization.

Unified Technical Standards

The lack of unified technical standards poses another challenge. Different technologies and methods used by companies lead to compatibility and interoperability issues. Apple’s white paper supports the EU’s interoperability policy but highlights risks in interpreting the law, emphasizing the need for open and interoperable technical standards to maximize data privacy protection.

Looking ahead to the overseas advertising market in 2025, digital advertising will continue to dominate and become more technologically advanced and intelligent under the leadership of AI.

As technology continues to advance, collaboration among advertisers, media, and advertising companies is becoming closer. With the trend of increasing data sharing and technology becoming more complex and embedded in products, building mutual trust will become a core focus in the future. Only with full trust among all parties can safe data sharing and effective utilization be achieved, driving continuous innovation and development in the advertising business.

GroupM, the media investment group under WPP, predicted in December that the overall scale of the advertising industry will exceed $1 trillion for the first time in 2024 (excluding U.S. political ads), and will grow by another 7.7% in 2025. Perhaps we should regain our confidence and look towards global ‘advanced exploration.’ After all, change is already happening, and those who seize the opportunities early will reap the benefits first.