‘Modern-day gold rush’: WPP shows AI and tech are reshaping advertising

The infrastructure being built around artificial intelligence — from data centres to power grids — is reshaping the global economy and the advertising industry with it, according to WPP Media forecasts.

In its 2026 This Year Next Year report, WPP Media describes AI as a “modern-day gold rush”, spurring a new wave of growth that is flowing through technology investment, media platforms and the systems powering digital advertising.

The report points to an ad market growing faster than expected globally, while Australian growth is forecast to hit 7.4% in 2026 as retail media, search and social platforms capture more of the momentum. WPP has tipped the Australian advertising market to reach $21.6 billion in 2026, even as parts of the traditional media market continue to face structural pressure.

The local forecast points to a market that remains resilient despite a tougher economic backdrop, but also one where the shape of growth is changing quickly.

WPP Media said content-driven advertising, including TV, audio, print and social video, will still account for 63.4% of total Australian ad revenue in 2026. However, that share is expected to fall to around 58% by 2031 as performance-led channels, retail media and emerging AI search formats take a larger role.

Retail media is forecast to be the fastest growing channel in the Australian market, reaching $2.3 billion in 2026, up 19.5%.

By 2028, WPP Media expects retail media to overtake total TV advertising revenue, reaching $3.07 billion and an 8.4% share of the market.

Search also remains a major growth engine. WPP Media expects search advertising in Australia to grow 9.5% in 2026 to $7.25 billion. When generative search, including LLM-driven advertising, is included, growth rises to 10.4%, pointing to early incremental growth from AI-powered search surfaces.

Social and broader digital platforms, including YouTube, are forecast to grow 10% in 2026 and 12.3% in 2027, before moderating to around 7% by 2031.

The picture is less comfortable across parts of the legacy media market.

Total TV revenue is forecast to fall to $3 billion in 2026, down 6.2%, and decline again to $2.8 billion in 2027. VOD is expected to account for 29% of total TV revenue in 2026, before rising to 66% by 2031.

Audio revenue is also forecast to decline, falling 4.1% to $1.2 billion in 2026 and a further 1.4% in 2027.

Out-of-home remains the strongest performer among traditional channels, with revenue forecast to rise 7.1% to $1.55 billion in 2026 and reach $1.64 billion in 2027. Cinema is also forecast to grow 3.6% in 2026, despite ongoing pressure on discretionary spending.

Melissa Hey, chief media and investment officer at WPP Media, said Australia’s ad market continues to show resilience despite global uncertainty and a more challenging economic backdrop.

“Despite the re-acceleration of inflation, driven in part by rising global energy prices, the structural drivers of the advertising market remain firmly intact and advertising revenue growth remains resilient, with total market growth forecast at 7.4%,” Hey said.

She said the market’s outperformance is being underpinned by the continued shift to digital, sustained demand from government and small-to-medium businesses and growth from digitally native and smaller-scale businesses investing in performance-led channels.

Globally, WPP Media has revised its advertising growth forecast upwards.

Global ad revenue, excluding US political advertising, is now expected to grow 8.9% in 2026, up from the 7.1% forecast in December 2025. In the US, the forecast has been upgraded to 11.9%, from 7.4% in December, or 13.9% including political advertising.

WPP Media said global advertising revenue as a share of GDP is now at its highest point since its records began in 1999, surpassing the dot-com peak of 2000. But unlike that period, the current surge is being driven less by brand exuberance and more by measurable performance.

The forecast also points to the continued concentration of global advertising revenue among major technology platforms.

Outside China, Alphabet, Meta and Amazon are expected to account for 57.6% of total ad revenue, while the top 25 sellers globally represent 75%. WPP Media said none of the top 10 sellers is a traditional media owner.

Generative search is expected to become the fastest-scaling new advertising channel measured by WPP Media, reaching around US$5.1 billion globally in 2026, US$32 billion by 2028 and more than US$100 billion by 2030.

Global content-driven advertising is projected to reach US$720.2 billion in 2026, growing 8.2% year-on-year. However, WPP Media said the headline figure tells a deceptively stable story, with content’s share of total advertising revenue expected to fall from 57.5% in 2026 to 55.5% by 2031.