The latest forecast from WPP Media shows AI driving growth across search advertising, but government restrictions could see social decline.
Generative search is becoming one of the fastest growing advertising channels with ad revenue projected to surpass $100bn globally by 2030, according to WPP Media’s latest This Year Next Year report.
Global advertising revenue for generative search – which includes Google’s AI Overviews and LLMS such as ChatGPT and Gemini – is expected to reach $5.1bn in 2026.
The US dominates this channel, accounting for approximately 60% of total ad revenue at £3bn in 2026. China, the second largest market for generative search, is expected to reach $607m this year, largely driven by Baidu’s AI integration and ByteDance’s Doubao.
The other markets tracked include the UK, Thailand, Spain, Denmark and Germany, with each contributing between $80m to $300m in ad revenue.
Currently, generative search represents just 1.9% share of all search ad revenue, however, it is on a trajectory to capture 39.2% by 2031.The report noted that performance reporting across AI channels was limited as at the time of writing, paid advertising in AI environments was not available in all markets.
The channel is forecast to expand to $32bn in 2028 before exceeding $100bn 2030.
Together with traditional search, which includes revenue from search engines Google, Bing, Baidu, Naver, and Seznam, it is expected to account for 21.8% of all advertising revenue.
Advertising revenue from traditional search is forecast to reach $267.2bn globally in 2026 – a 8.4% growth year-on-year (YoY).
While growth remains positive, analysis showed there is a consistent pattern in markets with AI Overviews – there is a shift in search queries being resolved in zero clicks.
Kate Scott-Dawkins, global president, business intelligence at WPP Media and author of the report, described the AI arms race as akin to the gold rush during the !800s in the US.
“If you listen to a lot of the rhetoric right now from AI labs and people in tech, there is an inevitability about artificial general intelligence that is creating this rush to succeed at all costs before the other person or company or market,” she said.
“[This] has really driven a ton of investment that would seem to defy logic in terms of the pace of growth.”
Scott-Dawkins highlighted that while the advertising industry is not directly the AI industry, it is “financing it”, as a lot of the companies developing the tech are investing the money they earn from their advertising revenue streams.
“[Therefore,] it is incumbent on us as an industry to really understand this transition, understand what we want to build, not just that it’s going to happen regardless,” she added.
Global ad growth despite geopolitical conflicts
Despite the conflict in the Middle East, inflated oil prices and continuous geopolitical tensions, AI is supercharging growth in advertising.
Global advertising revenue (excluding political advertising) is now forecast to grow by 8.9% in 2026 to $1.3trn – an upward revision from 7.1% that WPP predicted in its December report.
In the US, which represents almost 40% of global advertising and where the AI rush is most concentrated, ad revenue is expected to grow by 11.9%. While for Europe, that figures sits at 6.9%, for Asia-Pacific at 6.7%.
Latin America is projected to be the fastest-growing regions for advertising revenue in 2026 at 13%, with Brazil and Mexico capturing 70% together of all regional spend.
Social media growth to decline
Social and other digital channels are estimated to grow by 18.8% in 2026 to $465.2bn, before decelerating to 8.4% in 2027.
Its share of total advertising is on track to reach 37.2% this year and will continue to expand through to 2031, which could make it the single largest channel and contributor to growth.
AI-driven optimisation is among the key factors sustaining growth in the marketing channel, alongside Asia-based advertisers like Temu and Shein, using social as a primary acquisition tool.
The deceleration predicted for 2027 onwards reflects three converging trends: the first is time spent on social media platforms is expected to plateau or decline in some markets.
The second is age-related restrictions or bans taking effect in Australia, Canada, Greece, Indonesia, Spain among others. Yesterday, the UK’s Prime Minister announced a flat-out ban on social media for under-16s, which is due to come into effect next year.
Other countries also considering tighter restrictions include France, Germany and Poland.
Commenting on the impact the ban could have on advertisers, Scott-Dawkins said: “We see less of an immediate impact than the longer-term potential for these kinds of moves to lead to a behaviour shift with kids and young adults in which they find other ways, both online and in-person, to build community, find information, and discover new things.”
Content-based and gaming see modest growth
WPP’s report also predicts global content-driven advertising revenue to hit $720.2bn in 2026, but total share will continue to fall from 57.5% this year to 55.5% by 2031.
This is largely driven by a migration to subscription models like Substack and Patreon on ad-supported open web.
Gaming is projected to grow by a third (33.1%) to $13.3bn in 2026. The high growth rate is off a low base as gaming advertising represents just 1.1% of all advertising.
Within the channel, growth is concentrated in mobile, with rewarded video and playable formats expected to drive a bulk of advertiser activity.
