Budgets 2025: Retail media and CTV will dominate adspend

With the January blues behind us, 2025 is shaping up to be a promising year for the advertising industry. Magna forecasts a global ad market growth of 6.1%, bringing total revenues close to the trillion-dollar mark at US$990 billion. In contrast, GroupM predicts an even more optimistic increase of 7.7%, projecting revenues to reach $1.1 trillion, with the APAC region expected to see an impressive growth rate of 8.3%.

This growth is largely driven by various digital formats, which have defied expectations of a slowdown. Instead, advertising accelerated in 2024, maintaining a faster growth rate than previously predicted.

"The primary factors behind this growth are certainly digital revenues, with continued positive growth across the major platforms (Google, Meta, Bytedance, Amazon and Alibaba) and further growth in digital extensions of traditional media such as CTV and pDOOH as well as retail media," says Anita Munro, chief investment officer APAC, GroupM. "These trends have been consistent for some time and continue to show buoyancy despite the political and economic challenges faced over the last year."

While the shift towards digital media follows a natural progression in consumer behaviour—particularly for shopping, video, audio, and out-of-home (OOH) advertising—there is growing speculation about whether ad spend will increasingly move away from traditional platforms like Google Search towards emerging social and retail channels. Especially as younger consumers increasingly favour these newer platforms.

"Google search remains a highly effective channel for many of our clients still," says Arun Kumar, director of activation and experience at Assembly APAC. "However, we see incremental dollars moving to emerging social platforms and retail networks—driven by consumer behaviour and the promise of greater contextual relevance. Younger audiences discover and search for products differently—often driven via social feeds and creator content—so we need to ensure we meet them where they’re most engaged." 

Indeed, GroupM continues to see growth for traditional forms of search (across Google, Baidu, Bing and Naver) with 2025 forecast at 5.8% in APAC.

"Search is positively being impacted by AI-led innovations such as generative search results and visual search integrations such as Google Lens," says Munro. "This is good for both users and advertisers alike in improving utility and performance. 

But it is also true that the definition of search is broadening, which can be seen in many forms. 

"Users are increasingly searching for interests, information and products within social platforms such as TikTok and YouTube, as well as searching for products and product categories in retail marketplaces, and even within AI platforms directly such as ChatGPT and Perplexity," adds Munro.

Offline budgets shifting to retail media

Stanislas Albin, media strategy director, Jellyfish Singapore, says the real shift leading to additional budgets on social commerce, retail media, CTV or influencer marketing comes from budgets that were historically allocated offline. 

"Budgets follow the natural media consumption of millennials and Gen Z," says Albin. "Typically, retail media gains can come from offline trade marketing budgets, as brands shift focus from in-store promotions to the digital retail ecosystem. When online sales grow faster than in-store, many organisations need to review their distribution models and increase their budgets where they see opportunities."

In APAC, Alibaba, Shopee, and Lazada are leading this charge. Platforms like TikTok Shop and Instagram Reels have become primary discovery channels for younger consumers, with a 22% YoY increase in social commerce spend.

"Rather than an outright decline in Google’s dominance, we anticipate redistribution within search and intent-driven environments, balancing traditional search with retail, voice search, and GenAI search on LLMs integrating ad solutions at an exponential pace," adds Albin.

In any case, budget spend on retail media is steadily increasing, posing some threat to traditional media channels. GroupM forecasts global retail-media revenue for 2025 to reach $176.9 billion, surpassing total TV revenue (including streaming) for the first time and representing 15.9% of total advertising. And APAC represents the largest retail-media region at an estimated $97.8 billion in 2025 and 13.5% growth. 

"Retail media, in particular, benefits from enhanced attribution and proximity to purchase decisions," says Paul Waller, chief investment officer of IPG Mediabrands APAC. "In APAC, local retail platforms like Shein and Temu drive significant growth by leveraging regional manufacturing strength. While traditional media will continue to play a role in building long-term brand equity, retail media faces challenges, particularly around consumer privacy concerns related to data sharing and potentially invasive practices."

Rather than competing, Albin says that retail media will always complement brand-building: "Success lies in balancing awareness-driven investments (for a specific brand to remain top of mind in the category) with conversion-driven retail strategies (in partnership with a retailer, also selling competitor brands). Traditional media can now be bought digitally, but the role of brand-building channels remains essential and can’t be replaced by retail media."

While for now, retail media is not typically seen as a direct competitor to traditional media channels, it does stand as an attractive alternative.

"The access to first-party retail data is compelling," says Kumar. "The variety of solutions offered and the ability to close the loop on attribution will influence the shift of budgets. For our client portfolio, retail media complements our media mix for endemic brands. We're optimistic about the progress for non-endemic brands, but we hope to see more opportunities in this space."

Fastest-growing markets for CTV in APAC

Alongside retail media, connected TV (CTV) advertising is also looking ripe for more budget spend. High growth and opportunities are predicted for CTV (and more broadly streaming TV) in APAC with 14.4% growth forecast in 2025. Markets such as Australia and India continue to show particularly strong growth at 24.8% and 32.5% respectively, according to GroupM data.

India is currently the fastest-growing market for connected TV (CTV), experiencing a remarkable 32% year-over-year growth, driven by platforms such as Disney+ Hotstar and JioCinema, alongside increasing broadband access, according to Jellyfish's Albin. Australia follows closely with a high CTV adoption rate of 83%, where broadcaster video-on-demand (BVOD) platforms like Channel 9 and Channel 7 are expanding their advertising inventories. Meanwhile, Southeast Asian countries like Indonesia, Thailand, and Vietnam are emerging as key growth markets, fuelled by rising smart TV adoption and the proliferation of ad-supported video-on-demand (AVOD) services.

"This growth is primarily driven by the decline of linear TV viewership among younger demographics, and the rapid expansion of streaming platforms like Netflix and Disney+," says Albin. "These solutions offer precise targeting and measurable results, making them a goldmine for brands. However, a significant challenge for brands in APAC remains the standardisation of measurement and attribution."

Alongside CTV there is also a growing demand from advertisers for addressable TV solutions where more advanced audience targeting capabilities help to optimise reach deliveries and reduce wastage across viewing on both linear and streaming TV as viewing habits shift away from more traditional formats. 

Optimistic outlook

Overall, the forecasts reflect optimism in adland and exciting opportunities for 2025 to embrace the adoption of new digital tactics and AI-powered solutions. 

"Within the digital growth areas, we see a large interest in influencer and social commerce and expect this to continue to increase in overall investments in 2025," says Munro. "Advertisers are seeing the impacts on driving business, and there is fast innovation opportunity ahead with newer formats (such as the growth of live streaming and messaging), and AI-enhanced production capabilities, allowing rapid creation of more tailored, personalised and native communications." 

While media channels that leverage AI advancements, particularly retail media and CTV, are expected to benefit the most, TV, print media, and traditional OOH are expected to see a decline, as digital-first strategies increasingly take their place. Meanwhile, social media platforms may also face challenges due to declining trust from the spread of misinformation and disinformation, potentially impacting their growth trajectory.

"Brand safety concerns on social media platforms like Meta and X (Twitter) face increasing scrutiny over misinformation and AI-generated content, which could impact advertiser trust and budget allocation," says Albin. "The rise of gen AI-driven content automation raises questions about authenticity, brand association, and ethical responsibility, but only time will tell how users and brands will navigate this evolving landscape."