AI-driven ad spending is surging, but total advertising growth is losing momentum. WPP Media projects a sharp rise in generative search ads, yet the industry’s overall pace is set to decelerate.
Media and publishing professionals tracking the intersection of AI and advertising are facing a new paradox: while spending on generative search ads is set to skyrocket, the overall growth rate for ad spending is expected to slow. WPP Media’s latest mid-year forecast describes the rapid expansion of AI as a “gold rush” largely funded by the advertising sector, with generative search advertising projected to hit $5.6 billion in 2026, $32 billion by 2028, and $100 billion by 2030. This represents a compound annual growth rate near 100% over five years.
Despite this surge in a new ad category, WPP Media’s report indicates that total ad spending growth will decelerate, dropping from 8.9% in 2026 to 6.5% by 2030—a 27% decline in the growth rate. Kate Scott-Dawkins, president of WPP Media Business Intelligence and the report’s lead author, explained that while advertising is still outpacing GDP growth, sustaining double-digit increases year after year is challenging, even for major global platforms.
Scott-Dawkins noted that the ad industry is fueling the development of AI tools, but much of the immediate benefit is flowing to those providing the infrastructure—comparable to selling picks and shovels during a gold rush—rather than directly to advertisers themselves. She pointed to business-to-business (B2B) services as a potential area for agencies to find new growth, especially as AI-native companies mature and seek help with brand building and reputation management beyond what self-serve platforms offer.
She also suggested that as these AI-driven companies grow, they may eventually turn to agencies for support in establishing authenticity and authority, both with consumers and within large language models. While new categories could emerge to re-accelerate ad growth, Scott-Dawkins emphasized that even a 7% annual increase remains significant, despite being lower than previous years.
For those interested in broader shifts in news distribution and audience behavior, recent data shows that direct traffic to publisher sites is declining, with social and video platforms now leading as primary news sources. This trend is explored in detail in an analysis of Reuters Institute data on news traffic and subscriptions.
