Q-Series: How will new video platforms disrupt the USD 820bn global advertising market?

The global advertising industry is wrestling with rising macro uncertainly but a new age of competition is developing underneath the surface. In this report, we explore the emergence of new ad players in both the long-form and short-form video market. Simply stated, new ad supported platforms are bringing new inventory and new options for ad buyers. Depending on consumer engagement patterns and regulatory influences, this has the potential to drive meaningful share shifts and disrupt the USD 820B+ global advertising market. In the scenario most conducive to new entrants, we estimate disruptors could reach 15%+ of the global ad market ( or ~20% ex China) over the next five years, driving pressure across linear TV and existing digital platforms. 

TV historically has been the main platform for ad buyers to reach large, engaged and captive audiences against professionally produced programming. That said, this dynamic is rapidly changing amid fragmenting viewership (streaming viewership to surpass traditional TV by 2026 in the U.S.) and declining linear investment (streaming content spend set to match U.S. linear for the first time in 2023). This presents a real risk to what's left in traditional TV, especially as newer platforms increasingly offer ad buyers enhanced targeting, interactivity and ultimately reach.

The Global Advertising market is a USD 820B+ industry, growing at an average ~10% annually over the past five years and projected 7% CAGR over the next five. This would put advertising at ~0.9% of global GDP, a percentage that has been rising over the years. In many ways, the health of the overall economy and advertising market are closely linked. Brands are more willing to spend if they expect returns on their marketing dollars; at the same time, advertising is one of the easiest areas to pull back when uncertainty rises.