Another forecast, another reminder that ad spend is running its own race, economy be damned.<\/p>\n
This time it\u2019s IAB Europe\u2019s latest AdEx Benchmark Report, which clocked continental ad spend up 10.5% year over year to \u20ac131 billion \u2014 roughly the size of Morocco\u2019s entire economy, according to the report\u2019s author and IAB Europe chief economist, Daniel Knapp.<\/p>\n
Digital now soaks up around 70% of that spend, and while Europe\u2019s market is still barely half the size of the U.S. in absolute terms, it\u2019s growing faster.<\/p>\n
The driver isn\u2019t exactly new. Video, in all its forms, from CTV to social video, is hoovering up ad dollars for media owners, now accounting for more than half of all display investment in Europe. Social video, in particular, did the heavy lifting, up 25% last year, which helped push social advertising overall to \u20ac35.5 billion, a 19.2% climb.<\/p>\n
Smaller advertisers have been pivotal to this. Despite the platforms themselves being anything but new \u2014 Meta, TikTok and Snap are all comfortably mature businesses at this point \u2014 Knapp pointed to self-serve tools as a key growth engine, with SMB advertising doing a disproportionate share of the lifting. It\u2019s a reminder that social\u2019s growth ceiling keeps moving not because the walled gardens are winning new giant accounts, but because the on-ramp for a small business to start spending has gotten so frictionless that volume keeps arriving from the long tail.\u00a0<\/p>\n
\u201cA lot of players in our space have advertised themselves as, in a sense, captains of managing complexity,\u201d said Knapp during a panel discussion of the report yesterday (July 7). \u201cI think that narrative is where it has really ended. It\u2019s for many about simplification. Those who can facilitate that are going to win in that SME space.\u201d<\/p>\n
The more this has happened, the more display \u2014 stripped of video and social \u2014 has contracted. Standard display units, the banners, native newsletters and affiliate placements that used to define the category, actually shrank in 2025, down around 0.8% year over year, per the report.\u00a0<\/p>\n
Retail media, meanwhile, keeps muscling its way further onto media plans, growing 16.7% to \u20ac13.3 billion, per the report. Crucially, most of that money isn\u2019t new, it\u2019s old trade and shopper marketing budgets getting mediafied, not fresh ad dollars entering the system. That\u2019s starting to shift, though, as the category matures.<\/p>\n
\u201cWe see lots of money still locked in trade relationships, so it\u2019s money that hasn\u2019t been mediafied yet, but that is done as part of supplier discounts and vendor agreements between a retailer and a manufacturer,\u201d said Knapp.\u00a0<\/p>\n
Bigger picture\u00a0<\/p>\n
These are just the latest chapters in a story that\u2019s been unfolding since the coronavirus first hit in 2020. It fast-forwarded the future at breakneck speed: more people streaming, shopping and living online, and advertisers following the attention there, with the added advantage that spend in those channels could be dialed up or down at will, making it far easier to scale investment as the market lurched. The wars, economic turbulence and geopolitical instability since have only added momentum to the shift.<\/p>\n