Annual worldwide spending on marketing continues to increase and will reach $4.7 trillion by 2025, according to a Forrester report. This is an increase of $1.1 trillion from 2021 to 2025, a compound annual growth rate (CAGR) of 7% — substantially above the 5% CAGR from 2015 to 2019.
The biggest spenders. Most of that spending comes from the US and China. They accounted for 53% of the spend in 2021 and are expected to drive 73% of dollar growth between now and 2025.
Other key findings:
- IT software and services will be the biggest dollar growth driver. While IT software and services represented 7% of marketing investment in 2021, it will drive 14% of the dollar growth from 2021 to 2025 – by far the most of any industry. It has been a big beneficiary of the digital transformation spurred by the pandemic.
- US Companies spend the most on marketing – $1.4 trillion, or 40% of global marketing spend in 2021. They spend a relatively large amount on marketing – 7.7% of revenue versus the global average of 5.6%.
- Marketing spend growth will see a boost from Chinese companies. Chinese companies represented only 13% of global marketing spend in 2021, however they will constitute 27% of the growth from 2021 to 2025.
- Post-pandemic recovery has been swift, but industry performance varies. Healthcare and online retail have performed well throughout the pandemic, whilst financial services, property, and travel have lagged the most.
Why we care. This once again underlines the accelerated shift to digital marketing. Fueled by the change in pandemic-driven changes in consumer behavior, it has been embraced by companies because the ROI is easier to measure. It also shows marketing is much more important to businesses in the world’s two largest economies than to those in the rest of the world.