Just five companies are expected to grab more than half of global ad dollars this year, with the advertising industry set to exceed $1 trillion in revenue for the first time.

Those companies include Amazon (AMZN), Alphabet (GOOGL) and Meta (META), along with China's Alibaba (BABA) and privately held ByteDance, the Financial Times reported, citing a new Group M report.

Those five leaders are far different from the traditional Big 5 ad agencies that dominated the pre-social media advertising landscape. As a result, traditional players are regrouping as Big Tech and artificial intelligence continue to ascend in (and disrupt) the global advertising market.

One of the fastest-rising names on the S&P 500 Monday was Interpublic Group (IPG), one of the world's largest legacy ad agencies, which announced plans to merge with peer Omnicom Group (OMC).

Digital Pushes Advertising Industry Above $1 Trillion
Media agency GroupM issued a report estimating that global advertising revenue will rise 9.5% in 2024, climbing a further 7.7% in 2025 to $1.1 trillion. Digital advertising continues to power growth at the expense of traditional advertising channels such as television, print and radio. The firm said in a new report that digital advertising will account for 73% of total advertising in 2025 and almost 77% in 2029.

Advertising growth is outpacing GroupM's expectations despite macroeconomic uncertainties in major ad markets. It expects most of the growth to benefit the largest sellers of digital advertising from the technology sector — such as Alphabet's YouTube, Meta's Facebook and ByteDance's TikTok — rather than advertising agencies and other marketing service providers.

But the report warned that possible tariff wars and a stronger dollar after Donald Trump's presidential election win could chill the advertising market.

Alphabet stock rose less than 1% on Monday, trading about 4% below a 182.49 buy point. Meta fell in buy range.

Omnicom And Interpublic To Merge
On Monday, Omnicom Group said that it has agreed to buy rival Interpublic Group in a $13.25 billion, all-stock deal. The merger of the two major ad agencies would create the world's largest advertising company, with more than $25 billion in combined revenue.

It would reduce the traditional "Big 5" ad agencies to the "Big 4."

Interpublic investors would receive 0.344 Omnicom shares for each share held. The deal is expected to be accretive to earnings for shareholders of both companies, according to their news release. Interpublic stock surged 13% in early trade Monday, trimming that gain to 3.5% at the close. Omnicom sank more than 10%.

"We are pretty confident this is not going to create any regulatory issues," Reuters quoted Omnicom CEO John Wren telling analysts on a call.

"The world isn't divided into four companies — you have things like Google, Facebook, Amazon ... servicing people's marketing needs," Wren added.

'Top Stocks For E-commerce Growth'
Meanwhile, e-commerce sales continue to fuel digital retail advertising growth.

In a note to clients on Monday, Bank of America analysts projected that global e-commerce will grow 8% through 2030, with the e-commerce share of total retail sales expanding to 29%.

The firm named Amazon and Alibaba as "our top stocks for global e-commerce growth and earnings exposure," along with smaller internet retailers Chewy (CHWY), Korea's Coupang (CPNG), and Singapore-based Sea (SE).

Amazon stock pegged a new high on Monday, building on a successful November earnings breakout. But it closed fractionally lower. Alibaba surged 7.5% on China stimulus plans, still below a falling 50-day moving average. But Chewy, Coupang and Sea shares fell.