Behind the Numbers: Trends and Events to Pay Attention to in 2025—Why Content Production Will Struggle, Major Big Tech Trials to Watch, and More | Jan 3, 2025

Summary

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.

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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.

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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).

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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).

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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.

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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.

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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.

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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.

Transcript

[Paul Werner]

Is it going to be the holding companies with all of their scale and all of the investments they're making in AI? Or is it going to be the Googles and metas of the world and probably other platforms that have not yet developed their own AI powered self serve advertising tools but are likely to.

[Marcus]

Hey gang. It's Friday, January 3rd. Jenny, Paul and listeners. Happiest of brand new years to you all and welcome to behind the Numbers and E Marketer Podcast. I'm Marcus. Today I'm joined by two folks. Let's meet them. We start with the head of all of our research here at eMarketer, based in New York, it's Jennifer Pearson.

[Jennifer Pearson]

Happy New Year. Thanks for having me.

[Marcus]

Thanks for being here. Happy New Year to you too. We also have the Vice President of Everything. He is based in Maine and we call him Paul Werner.

[Paul Werner]

Great to be here. Happy New Year.

[Marcus]

Hey chap. Happy New Year to you too. Thank you both for being here for this episode. And a special one it is. Today is the first episode of our new slate of podcast content that as always aims to help marketers, retailers and advertisers better understand the ever changing world of digital media through thought provoking conversations. How will it work? Glad you asked. Well, Mondays and Fridays I will be hosting a new video podcast called behind the Numbers where I'll be speaking with guests from the marketer crew, familiar voices and faces, and folks from other companies as well for a 20 minute chat about media, advertising and tech, discussing everything from AI's impact on our daily lives to the shape shifting universe of social media and more. Every Wednesday you can still hang out with Sarai Liebo, host of our Reimagining Retail show. She covers latest in commerce, media, consumer shopping habits and the retailers that are making the biggest moves in everything retail. And then every second Tuesday of the month, Rob Rubin will be discussing the most important brand banking and payments conversations from crypto to Buy now, pay later to how banks will look in the future. So they're the three shows that we have for you. Behind the Numbers Mondays and Fridays, Reimagining Retail on Wednesdays and then banking and payments will be every second Tuesday of the month. So make sure you tune into the new video and audio episodes Monday, Wednesday, Friday and the occasional Tuesday on Apple Podcasts, YouTube, Spotify or wherever else you like to listen. All right folks, let's get to today's episode. Today's Episode Fact what's the tallest animal in the world? This is not a trick question.

[Jennifer Pearson]

Land animal.

[Marcus]

Yes or great qualifier.

[Paul Werner]

Giraffe what would it be other than a giraffe? Okay.

[Marcus]

Yeah. I don't know. I wonder what the second. I should have looked that up. That's probably more interesting. What's the second tallest? But it is the giraffe. Yes. Males can grow up to 18ft, which is five and a half meters tall. Females about 14ft. It's about four and a half meters tall. And their babies, called calves, are born six feet tall or. Or two. That's my height. Or two meters tall. Basically. These not so little ones can grow up to one inch per day. So they're born tall, they grow real fast. And not just grow real fast. They develop really quickly. Within 30 minutes of being born, they are standing 30 minutes. Half an hour, quick half an hour. And only hours later, they're able to run with their mot, which is just absolutely remarkable.

[Paul Werner]

That is crazy.

[Marcus]

Yeah.

[Paul Werner]

So if an adult male can grow 18ft, that's like. I thought they just had four feet. Oh.

[Marcus]

It'S too early in the league.

[Paul Werner]

It was horrible. I've gotten a year off to an atrocious start, but, you know, for me, making atrocious jokes is totally on brand. So here I am, folks.

[Jennifer Pearson]

I was just gonna say I knew something was going on.

[Marcus]

That's why we have you on. Giraffes get most of their water from their leafy meals and only need to drink once every few days. Because of the water they get from these meals, their tongue is over 20 inches long or 50 centimeters to help them reach leaves and buds that are extra high up. So as if they weren't tall enough, their tongue will help them to get to the food at the very, very top of the tree. Wonderful creatures. Anyway, today's real topic, trends and events to pay attention to in 20. So, folks, today we are peeking into 2025 to discuss some of the most important milestones the upcoming year. And so all the ones we have to discuss today, we thought we'd start with one from Jenny because she wanted to talk to us a bit about what she's paying attention to when it comes to digital ad spending and any kind of milestones or things to watch in the digital advertising realm that are most important. So, Jenny, what do you have for us?

[Paul Werner]

Right?

[Jennifer Pearson]

I mean, it's not E marketer if we don't discuss digital ad spending. So a milestone in 2025 is that digital ad will surpass the 80% share of total ad spending in 2025. So it's inching past $347 billion. And that's a 12% change over year on year. So we've hit the 80% milestone this year. It's led by retail media and video and social. Let's all have a large, large share and large increases year on year.

[Marcus]

This one is astonishing. And it's not just because it's at 82%, but because of where it was before the pandemic. So right before pandemic 2019, it was about 55%. It's basically just over half of the advertising world was digital and now it's 4 and $5. It's 82%. And so that's one REM part of this. It's kind of like with Elon Musk's wealth, it's not just that he's the richest person in the world with $300 billion, it's that just before the pandemic it was $20 billion and it's gone from 20 billion to 300 billion. You're looking at the milestone here. 82% of total media ad spending will be digital. But where it was a few years ago is just remarkable. And not only that, Paul, next year is going to add another 2% share on top of that. So it's not like it's flatlining and that's as far as it's going to go. It looks as though it's going to consum whole of the total media adpy at this point. Just in a couple of years.

[Paul Werner]

Yeah, I mean, we're looking at close to 87% by 2028. So yes, this is going to become a point where I think we're probably still going to see some smattering of traditional advertising that's going to continue to take up maybe 10% ish of the total. But for all intents and purposes, digital has completely taken over.

[Jennifer Pearson]

I am curious to see the digital ad market in particular, but advertising in general is synonymous with changes in volatility in the economy. So it will be interesting to watch what happens this year as we have a new administration coming in and the economy is in an okay shape, but a lot of volatility there. And that goes hand in hand with ad spending.

[Paul Werner]

Yeah, definitely unpredictable. By the way, another big milestone in 2025 will be that retail media ad spending will vault over traditional TV ad spending. So that's a first.

[Marcus]

Wow.

[Paul Werner]

And within a few years, actually retail media will be about twice traditional TV ad spending in the US which is crazy. Speaking of multiplying wealth, just so much.

[Jennifer Pearson]

Growth, 20% year on year.

[Marcus]

Oh, my gosh. And that's from was it about 55 billion at this point? I think 2024. So it's from multiples of, I mean, it's tens of billions. You know, achieving 20% growth off the back of that is really quite remarkable. So that sets the table really nicely. This kind of digital ad spending number that is going to continue to go up and up. And it's impressive as well because last year growth was at 15% digital ad spending growth in the US this year we're looking at about 12 and a half percent. So it continues to be incredibly robust. And zooming in on that world, something else we're going to be paying close attention to was some news that happened the end of last year. December 9th. Omnicom and Interpublic IBG, they're the world's third and fourth largest ad agency holding companies by revenue. They proposed a combined merger or a takeover, Omnicom taking over ipg. So if they come together, they're going to be the biggest of the ad agency holding companies. And Paul, you wanted to talk about this as a milestone, as something you're watching in 2025. Why is this story, this development?

[Paul Werner]

It's the first major realignment among the ad agency holding companies in a long time. There was an attempted merger by Omnicom and Publicis back in 2013 that did not succeed. It was called off in 2014. In addition to just realigning basically the big four into the big three, I think what's more significant about this is that it's being driven by some very big changes across advertising, not just among the holding companies, but across advertising in general. Really what it comes down to is that a growing share of advertising billings have been going directly from brands to platforms. Platforms like Google and Meta, which have AI powered platforms now. So with more of the spending going there and less going to the big holding companies and actually a relatively flat share going to independent companies. But the big holding companies have been seeing this erosion and I think they're really trying to claw it back and they're, they're using AI, which is interesting because AI is what's been pulling some advertisers away from the holding companies. So this is really a situation where AI is at the heart of it. But it just remains to be seen whose AI is going to win out in terms of getting these client billings. Is it going to be the holding companies with all of their scale and all of the investments they're making in AI, or is it going to be the Googles and Metas of the World and probably other platforms that have not yet developed their own AI powered self serve advertising tools but are likely to.

[Marcus]

Yeah, yeah, the why they're doing this is interesting. And there was a good Economist article basically explaining that one of the reasons is because Omnicom and ipg, they're kind of hoping to protect themselves against some of the changes proposed by an incoming Trump administration. One is he's hinted at curbing pharma ads, which is 7% of the US ad pie is pharma space, according to our forecasting team. So if that gets curtailed, that could affect the advertising world. And then number two, always talk about tariffs. People are nervous about the beginnings of a trade war which could hurt some big spending industries like cars and electronics. And apparently Omnicom and IPG's bosses promising savings of $750 million per year by merging shared functions. So that's a big part of the reason why they're doing this. And then you know, Paul, kind of what you were talking about earlier, this is no secret that the agency business has been hurting for a while now. The Economist was saying when you strip out the kind of up down period of COVID 19 and the global ad agency industry has grown barely 3% per year since 2018, according to Moffat Nathanson. And then the biggest five agency holding companies, so you've got WPP, Publicis, Omnicom, IPG, Interpublic and Dentsu, they had about a 30% share of all agency services revenue last year. That's down from 37% a decade earlier according to ad consultancy Madison and Wall. So it's gone from 37 to 30 for those big players. So two of them joining forces so that they could protect themselves against some of those other market forces which have been hurting them for some time and promise to continue.

[Paul Werner]

Yeah. And if you look at those small year to year percentage gains among the big four, the big five, and you overlay that with the figures Jenny mentioned about our outlook for digital ad spending in general or for ad spending. It's a big difference. So clearly more and more advertising spending is going to channels that bypass the big holding companies.

[Jennifer Pearson]

Yeah, it'll be interesting to see. I think this happens in the second half of 2025. So it'll be interesting to see the buildup or kind of lead up to this final merger. I think within the agencies. I was doing just a collection of reading aggregation on what what's going to happen with this may boost some boutique agencies, just some within the agency ecosystem. And then there might be some Competition for some of the wins and creative happening even within the ipg. And yes, that. Within that. You know, those companies now that they're going to be merged, they might be competing for some of the same business.

[Marcus]

Yes, yes. Pulling a lot of brands, a lot of companies under the same roof. And so you're going to see some savings, they say, some merging of shared functions. But is there also some obsolescence as you have so many things living under the same roof now? Jenny, what else are you looking at when it comes to this year, to 2025?

[Jennifer Pearson]

Yeah, I'll say all credit to my colleague Ross in calling out a prediction this year, content production. So just among the big major studios, content production is way down. So in Q3, TV and film production was down 35%. And so the platforms are having to kind of repurpose where, you know, consumers are spending their time and reach them. And so a lot of that will. They'll put that money into sports because it's such a high interest topic for consumers. So sports is definitely going to account for more streaming dollars in this year.

[Marcus]

Yeah, I thought this was an interesting one. Paul, I love your take on this because you've very closely covered TV and video for us for a long time. But this one, he's basically saying Hollywood productions continue to contract even though actors and writers are no longer striking. So I was surprised to see that, you know, movie shoots have fallen and aren't making kind of this rebound that we you might have expected. Now that actors, writers are back to work, what do you make of this prediction from Ross?

[Paul Werner]

I agree with the prediction. I think what's been happening is the writers and actors strike obviously dented production budgets for quite a while. And I think that once the media companies get used to a certain level of spending, they're not going to just suddenly revert to the previous level. They sort of realize there's probably more we can do and taking advantage of things like AI for some of the maybe lower hanging fruit in terms of voiceovers and content that you don't need to pay big budgets for. But I think to Ross's point, they have also really doubled down on sports deals and some of these deals came up for renewal, particularly NBA package. So these companies invested a lot. And the other thing to keep in mind is that even prior to the writers and actors strikes, which in some ways sort of came out of left field a year and a half or so ago, even before that, most of these companies had already pivoted from a growth type of mindset. Like trying to grow subscribers to more of a cost containment and more of a fiscally responsible mindset. So that was going to happen anyway, and that's what we're seeing now is still an outgrowth of that. So I think all of those trends are leading to a place where, yes, entertainment content production is definitely down, sports are up. But also I think these companies are just trying to be more mindful of the content budgets overall.

[Marcus]

Yeah.

[Paul Werner]

Yeah.

[Jennifer Pearson]

I think also turning to creators, which are a little bit cheaper way to produce content, is another outlet there.

[Paul Werner]

Yes. And for that we give a nod to our other colleague Jasmine Enberg, who's our lead voice on the creator economy and I know. So she would probably make that point if she was on this podcast. So. Well, good call, Jenny.

[Marcus]

Absolutely. Yeah. We're speaking to her and our colleague Minda about creator economy and social trends in an episode, I believe, coming out on the 13th of January. So stay tuned for that one. Paul, let's end with one more set of milestones, if you will, that you wanted to discuss, which is around antitrust. And there's a lot of antitrust cases going on with some of the big, or seems like all of the big tech platforms a lot to watch this year. What are you going to be focusing on the most when it comes to antitrust and some of the legal cases going on with Apple and Google, et cetera?

[Paul Werner]

Yeah, I mean, if you look at big tech, really all of these companies, so Amazon, Apple, Meta, Google and TikTok are all either being sued by the government or in TikTok's case, there's an imminent ban that I know we have discussed in other episodes and there's going to be more news soon, so we probably don't want to spend too much time on that. But if you just look at the other four companies, it's very hard to handicap what's going to happen because so much about this administration is hard to predict in the first place. And also we're still not at a point where the incoming president's picks for FTC and FCC commissioners are solid or approved. So we still don't know exactly how it's going to play out. But just based on what we know at this point, it does seem like there's almost like two narratives going on. One narrative is that Trump's pick for FTC commissioner, that would be Andrew Ferguson. He has made some very strong statements about reining in big tech. On the other hand, in recent weeks we have seen that the CEOs of every one of these companies including TikTok, has gone out of his way to ingratiate himself to president, to the incoming president, having private dinners and doing things that in this kind of administration can actually tip the scales. A lot of this comes down to favoritism and the administration has made no secret of the fact that it is very big on retribution and loyalty. So in that kind of environment, I think these companies are doing what they need to do for their own survival and it may just work. So it could be that that kind of approach ends up short circuiting some of the cases against these companies.

[Marcus]

Yeah. What's interesting with these to me is 2025 will be a significant year because we're going to get not just some more clarity on some of the verdicts, also some of the remedies. There also be a bunch of appeals. But these started, some of these started a long time ago. The Google one started at least the one where Google was deemed a monopoly, exhibiting monopolistic behavior. It was anti competitive. That one where they were basically paying Apple to be the default search engine. That One started in October 2020, the one against Meta from the FTC that started same year, four years ago. And even though we're going to get some more clarity of how they're going to be playing out this coming year, by no means are we going to see any kind of final decisions made and Bose tied on top of any of these neat little packages.

[Paul Werner]

Yeah, and it's worth noting too that there are two distinct Google cases. There's the search case, which is the one you mentioned, Marcus, and then there's the ad tech case. So yes, every one of these will go through at minimum, a very, very, very long appeals process. But there is the. That steps could be taken to limit the cases this year or essentially render them toothless. It's very hard to predict that, but I'm certainly not ruling it out. But yeah, I think in either scenario, whether something like that happens, which would be more momentous, or whether they just do what these legal cases do, which is drag on for years and years and years. I don't think we're looking at any substantial impacts in this calendar year. But we could, as you put it, Marcus, be getting more clarity.

[Jennifer Pearson]

I'm just keeping an eye on internationally. There have been certain countries, Australia putting limits on social media use with kids and children. So just keeping an eye on that this year.

[Marcus]

Yeah, yeah, that's a really interesting one. A first, a global first. Australia banning social media platforms for kids under the age of 16. So very interesting one. To watch to see if other countries are going to try to copycat that law. That, unfortunately, folks, is where we have to leave the conversation for today. A huge thank you to both of my guests for hanging out with me. Thank you so much to Jenny.

[Jennifer Pearson]

Thank you for having me.

[Marcus]

Absolutely. Thank you to Paul.

[Paul Werner]

Thanks, Marcus. Always good to be here.

[Marcus]

Yes, indeed. Thank you so much to the two of you for being on the first episode of the year. Thanks to the whole editing crew, Victoria, John, Lance, Danny. Thank you to Stuart who runs the team. And thank you to Sophie who does our social media. Thanks to everyone for listening in to behind the Numbers and E Marketer podcast. We hope to see you on Monday for an episode with myself and Bill Fisher and Evelyn Mitchell Wolf, where we'll all be discussing the top trends of 2020.