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
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You know, 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?

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, an eMarketer 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. Happy

Paul Verner

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? I'm 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 sarah lebo host of our reimagining retail show she covers the latest in commerce media consumer shopping habits and the retailers that are making the biggest moves and everything retail and then every second tuesday of the month

uh uh rob rubin will be discussing the most important 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 reimagine 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 fact. What's the tallest animal in the world? This is not a trick question. Hmm.

Land animal? Yes. Great qualifier. Giraffe? What would it be? That would be other than a giraffe. Okay. 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 18 feet, which is five and a half meters tall. Females, about 14 feet. It's about four and a half meters tall. And their babies, called

called calves, are born six feet tall 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, a quick half an hour. And only hours later, they're able to run with their mothers, which is just absolutely remarkable. That is crazy. Yeah. So if an adult male can grow 18 feet, that's like, I thought they just had four feet. Oh. Oh.

It's too early in the year for this. 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. I was just going to say, I knew something was coming, Paul. 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 centimetres 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 2025. ♪

So folks, today we are peeking into 2025 to discuss some of the most important milestones of 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?

Right. 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. Yeah.

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. 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%. So basically just over half of the advertising world was digital. And now it's four and $5, it's 82%. And so that's one remarkable 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 is 50%.

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 consume the whole of the total media ad pie at this point, just in a couple of years. Yeah, I mean, we're looking at

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

completely taken over. 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. Mm-hmm.

And the economy is in an okay shape, but a lot of volatility there. And that goes hand in hand with ad spending. 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. Wow. 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. Yeah. Just so much growth, 20% year on year. Oh my gosh. And that's from, was it about 55 billion at this point? I

I think 2024. So it's from multiples of, I mean, it's tens of billions, you know, to be 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 12.5%. So it continues to be incredibly robust.

And zooming in on that world, something else that we're going to be paying close attention to was some news that happened at 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.

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 interesting to you? It's the first major realignment among the ad agency holding companies in a long time. There

There was an attempted merger by Omnicom and Publicis back in 2013 that did not succeed. It was called off in 2014. So, 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.

And really what it comes down to is that a growing share of advertising billings have been going to directly from brands to platforms, you know, 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, you

But the big holding companies have been seeing this erosion. And I think they're really trying to claw it back. And 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. You know, 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? 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, they 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, it's...

Paul, kind of what you were talking about earlier, there's no secret that the agency business has been hurting for a while now. And 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

per year since 2018, according to Moffitt, 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 Walls. 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. MARK BLYTH: Yeah, and if you look at those small year-to-year percentage gains among the big four or the big five,

and you overlay that with the figures Jenny just 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 companies

spending is going to channels that bypass the big holding companies. 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 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. Yes. Yes. Pulling a lot of, um,

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? 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 put that money into sports because it's such a high interest topic for consumers.

sports is definitely going to account for more streaming dollars in this year. 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 are,

and writers are back to work. What do you make of this prediction from Ross? I agree with the prediction. I think what's been happening is the writers and actors strike, obviously dented, you know, 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, you know, 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 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. You know, sports are up. But also, I think these companies are just trying to be more mindful of the content budgets overall. Yeah. Yeah. I think also turning to creators, which are a little bit cheaper way to produce content as another outlet.

there. Yes. And for that, we give a nod to our other colleague, Jasmine Enberg, who's our lead voice on the greater economy. And I know she would probably make that point if she was on this podcast. So, well, good call, Jenny. 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 the big all of the big tech platforms a lot to watch this year a

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? 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 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. 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'll also be a bunch of appeals.

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 that 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 bows tied on top of any of these kind of neat little packages. 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 possibility 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

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. 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. 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 to want to watch to see if other countries are going to try to copycat that law.

MARK MANDEL: That, unfortunately, folks, is where I have to leave the conversation for today. A huge thank you to both my guests for hanging out with me. Thank you so much to Jenny. JENNY LANG: Thank you for having me. MARK MANDEL: Absolutely. Thank you to Paul. PAUL LEWIS: Thanks, Marcus. Always good to be here. MARK MANDEL: 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, an eMarketer podcast. We hope to see you on Monday for an episode with myself and Bill Fisher and Evelyn Mitchell-Wolfe where we'll all be discussing the top trends of 2025.