Behind the Numbers: Trends and Events to Pay Attention to in 2025

Released January 3, 2025 | Host: Marcus | Guests: Jennifer Pearson (Head of Research, eMarketer) and Paul Werner (Vice President, eMarketer)

In the inaugural episode of the new slate for eMarketer’s "Behind the Numbers" podcast, host Marcus, alongside Jennifer Pearson and Paul Werner, delves into the pivotal trends and events shaping the digital media landscape in 2025. This comprehensive discussion covers the meteoric rise of digital advertising, significant mergers within the ad agency industry, shifts in content production, and the ongoing antitrust scrutiny facing major tech giants.

1. Digital Advertising Surpasses 80% of Total Ad Spending

Jennifer Pearson kicked off the episode by highlighting a monumental shift in advertising dynamics. She stated, “Digital ad will surpass the 80% share of total ad spending in 2025, inching past $347 billion with a 12% year-over-year growth” (04:55). This surge is predominantly driven by sectors like retail media, video, and social platforms, which are experiencing substantial increases in their advertising investments.

Marcus emphasized the unprecedented growth by comparing it to Elon Musk’s wealth accumulation: “It's astonishing because just before the pandemic in 2019, digital advertising was about 55% of the market. Now, it's at 82%, and next year it’s projected to climb to 84%” (05:34). Paul Werner added a long-term perspective, forecasting that digital ad spending could reach 87% by 2028 (06:30), effectively overshadowing traditional advertising channels.

However, Jennifer noted the potential volatility associated with this growth: “Advertising in general is synonymous with changes in volatility in the economy. With a new administration and an uncertain economic landscape, ad spending could see some fluctuations” (06:51). Despite these uncertainties, the trajectory firmly points toward digital advertising’s dominance in the coming years.

2. Merger of Omnicom and Interpublic IBG: A Strategic Realignment

A significant development in the advertising industry is the proposed merger between Omnicom and Interpublic IBG, the world’s third and fourth largest ad agency holding companies, respectively. Paul Werner outlined the strategic motivations behind this move: “This is the first major realignment among the ad agency holding companies in a long time. It’s driven by shifts in advertising where more spending is going directly from brands to platforms like Google and Meta, bypassing the traditional holding companies” (08:50).

Marcus provided additional context, referencing a recent Economist article: “Omnicom and IPG are aiming to protect themselves against potential regulatory changes and economic uncertainties introduced by the incoming administration. They’re promising savings of $750 million per year through merging shared functions” (10:40). This merger not only consolidates the big players but also reflects a broader industry trend where holding companies are striving to regain their footing amidst the rise of platform-dominated advertising.

Jennifer added that this consolidation could invigorate boutique agencies and foster internal competition within the newly merged entity: “There might be increased competition for business and creative wins within IPG, and some boutique agencies could benefit from the shift” (12:49).

3. Content Production Struggles and the Rise of Alternative Media

Turning to content production, Jennifer Pearson highlighted a troubling trend: “Content production among major studios is down by 35% in Q3, despite the resolution of strikes by actors and writers” (13:29). This decline is attributed to a strategic pivot towards more cost-effective content creation methods. Paul Werner concurred, explaining that media companies are leveraging AI to manage lower-budget content and have significantly invested in sports broadcasting: “Sports deals, like the NBA package renewals, have seen substantial investment as platforms aim to capture high consumer interest areas” (14:59).

Additionally, Jennifer pointed out the increasing reliance on content creators as a more economical approach: “Turning to creators is another outlet, as it is a cheaper way to produce engaging content” (16:35). Paul acknowledged this shift, noting the growing importance of the creator economy: “Creators offer a cost-effective alternative for content production, aligning with the broader trend of fiscal responsibility within media companies” (16:44).

4. Antitrust Scrutiny and Legal Challenges for Big Tech

A critical area of focus for 2025 is the antitrust landscape surrounding major tech companies. Paul Werner provided an overview of the ongoing legal battles: “Amazon, Apple, Meta, Google, and TikTok are all either being sued by the government or facing imminent regulatory actions” (17:31). He highlighted the complexity and unpredictability of these cases, especially with the incoming administration’s stance on big tech.

Marcus expounded on the timeline and potential outcomes: “We are likely to gain more clarity on verdicts and remedies this year, but final decisions are still distant due to the lengthy appeals process” (20:28). Paul added that while some legal maneuvers might limit the effectiveness of these cases, substantial impacts are not expected within the calendar year: “Even if steps are taken to limit these cases, the real consequences are likely to unfold over several years” (20:28).

Jennifer also touched upon international regulatory actions, specifically noting Australia’s pioneering move: “Australia has banned social media platforms for kids under the age of 16, setting a precedent that other countries might follow” (21:18). This global perspective underscores the expanding scope of antitrust and regulatory scrutiny beyond the United States.

5. International Regulations and Social Media Restrictions

Expanding on regulatory developments, Jennifer Pearson highlighted Australia’s groundbreaking legislation: “Australia is the first country to ban social media platforms for children under 16” (21:18). This regulation aims to protect younger demographics from potential harms associated with social media use and could signal a trend towards more stringent international controls on digital platforms. The implications of such measures are significant for global advertisers and tech companies, potentially reshaping how digital media is consumed and regulated worldwide.

Conclusion

The episode concluded with a consensus on the transformative changes awaiting the digital media landscape in 2025. From the dominance of digital advertising and strategic mergers within the ad agency sector to the challenges in content production and the intensifying antitrust battles facing big tech, the discussions underscored a year of significant evolution and adaptation. Jennifer Pearson and Paul Werner provided insightful analyses, backed by robust data and industry expertise, making this episode a valuable resource for marketers, retailers, and advertisers aiming to navigate the complexities of the digital age.

For more in-depth discussions and the latest insights, tune in to future episodes of "Behind the Numbers" on Apple Podcasts, YouTube, Spotify, or your preferred podcast platform.