Report: Global advertising revenue to hit US$1 trillion in 2026

The total global advertising revenue is estimated to hit US$1 trillion in 2026, with revenues in 2028 to represent double the revenues of 2020, according to PwC.

Also known as Global Entertainment and Media (E&M) Outlook 2024-28, the outlook covers 11 revenue segments across 53 countries and territories across APAC, North America, Western Europe, Central Europe, Middle East and Africa, and Latin America. It aims to guide business leaders on which segments and markets will grow, and which are in danger of sinking.

According to the outlook, the global entertainment and media (E&M) industry revenues have continued to grow in 2023, with total revenues rising 5% in 2023 to US$2.8 trillion. Over the next five years, the E&M complex will grow at a more muted 3.9% compound annual growth rate (CAGR). The total revenue is projected to top US$3.4 trillion in 2028.

In terms of advertising, the global revenue is expected to grow at a 6.7% CAGR through 2028. Meanwhile, internet advertising is the largest and one of the fastest-growing components of the advertising industry. It grew 10.1% in 2023, adding US$52.5 billion in new revenues, and is projected to rise at a 9.5% CAGR through 2028, when it will account for 77.1% of total ad spending. 

Based on the analysis of the three broad E&M segments - connectivity, advertising, and consumer - advertising is projected to contribute 55% of the total growth in the E&M industry over the next five years.

Streaming services look to new models to drive growth

As the number and range of streaming services proliferate, a form of market saturation has begun to kick in. According to the outlook, global subscriptions to over-the-top (OTT) video services will rise to US$2.1 billion in 2028 from US$1.6 billion in 2023—representing a 5% CAGR. 

However, the global average revenue per OTT video subscription will barely budge, rising from US$65.21 in 2023 to US$67.66 in 2028. 

This plateauing effect is pushing leading streamers to reshape their business models and find new revenues beyond subscriptions, including the introduction of ad-based variants, cracking down on password-sharing, the introduction of live sports, and industry consolidation. 

Moreover, this consolidation is taking the form of bundling subscription service providers in developed markets. By 2028, advertising will account for about 28% of OTT global streaming revenues, up from 20% in 2023.

Gaming industry stands out as live events and global cinema rebound

Global gaming, which includes e-sports, continues its streak as one of the fastest-growing large sectors in the E&M universe, with total revenue hitting US$227.6 billion in 2023, up 4.6%.

Furthermore, the revenue is on track to top US$300 billion in 2027, almost double its level in 2019. APAC remains the largest regional market for gaming, representing 48.1% of the segment's global total, rising to 54.4% – or US$181.8 billion – in 2028.

Elsewhere within E&M, in-person, real-life, tech-enabled experiences such as live music and cinema remain key growth industries, with movie box office and music ticket sales representing 38.6% of 2023's net increase in consumer spending worldwide. Driven by large events such as musician world tours, live music revenues rose 26% and accounted for more than half of the overall music market.

Aided by various blockbuster releases in 2023, the cinema saw a 30.4% year-on-year increase in spending at the box office. Global cinema revenues are poised to surpass their pre-pandemic, 2019 levels in 2026.3

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Werner Ballhaus, global entertainment and media leader, PwC Germany, said: "As the global E&M industry continues to grow, market players face both risks and opportunities. Shifts in consumer preferences, and uncertainty around the continued impact of digital transformation and new and emerging technology such as generative AI, are inspiring a wave of business model reinvention."

"If market players are to gain their share of the growing revenue pools we identify, they will have to reimagine how their company creates, delivers, and captures value, leveraging the growth of advertising while also harnessing the powerful opportunity presented by AI. As consumers increasingly consume content online, companies will also need to diversify their product-offerings and continue to connect with consumers on the platforms where they spend more of their time," Ballhaus added.

Wilson Chow, global technology, media and telecommunications (TMT) industry leader, PwC China, said: "The global E&M industry has always thrived on technological disruption. To capitalise on the many growth opportunities, it must leverage the power of new and emerging technologies such as generative AI, re-shape business and creative models, and leverage the technology for advertising."

"So far, many of the applications of Gen AI in the E&M industry have focused on speed and efficiency. As we look ahead, the industry will have to focus on how Gen AI can lead to greater value creation through experimenting, iterating, and scaling new solutions and processes," Chow added.

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