eMarketer is reporting a notable slowdown in digital ad spend growth, with annual increases expected to fall to 8.7 percent by 2028. The era of rapid double-digit expansion is coming to a close as the market begins to stabilise.
A Tougher Budget Climate for Digital Teams
At a presentation in New York City, Zia Daniell Wigder, Chief Content Officer at eMarketer, shared insights on the pressures facing digital marketing teams. She highlighted how the past decade of volatility has forced teams to rethink strategy and resource allocation.
“What this means is that it’s gotten a little more challenging for digital teams to get the budget for all their initiatives when they’re no longer growing at much faster rates than their physical counterparts,” said Wigder.
She also pointed to a wider trend in consumer behaviour. Time spent on digital platforms is only expected to grow by two percent this year, according to eMarketer’s forecasts.
Platform Growth Becomes a Zero-Sum Game
Wigder described the current state of social media as a “zero-sum game era.” When one platform gains traction, another typically loses ground.
“While these things don’t make headlines… they’re going to have a very big impact in terms of how markets are developing,” she added.
AI Ad Spend: Still Early Days, but Gaining Ground
The marketing industry is keeping a close eye on agentic AI and large language models. While much has been said, actual spend remains limited for now.
In 2024, AI-powered search ads will account for just 0.7 percent of total search ad spend. That figure is expected to rise to 13.6 percent by the end of the decade.
“Despite all the talk about it, it’s going to take a while to really evolve,” Wigder explained. “A lot of the platforms are still working on exactly what their ad businesses will look like, and measurement is certainly not there.”
Retail Media Moves Fast, Tariffs or Not
Retail media continues to expand at speed. Wigder referred to it as “the third big wave of digital advertising,” and said its growth rate has already outpaced both search and social.
Some marketers have concerns over added costs, but advertiser interest remains high. Even with the threat of U.S. tariffs, eMarketer predicts retail media ad spend will reach close to $56 billion in 2024. That number could climb to $61 billion if tariffs are kept to a minimum.
“It took search about 14 years to go from zero to 30 billion in ad spend, took social about 11 years, and it took retail media five years to go through that growth period,” said Wigder. “If you looked at retail media, there’s much more linear growth.”
E-Commerce Holds Steady, But Discovery is Shifting
E-commerce is expected to grow by five percent this year, assuming moderate tariffs on imports. But Wigder believes the bigger shift will come from how AI reshapes the path to purchase.
“This is the idea of agentic AI that everyone is talking about,” she said. “If you look at what the shopping journey looks like right now, it is a whole lot of back and forth.”
She noted that brands selling lower-priced items may feel the change first. Consumers could soon rely on AI to automate routine purchases. “But you’re not going to do this [program an AI agent to make a purchase on your behalf] for a car, right?”
