Businesses have promoted what they sell for thousands of years. Artificial intelligence is now opening another way to invest in the advertising industry. Here are the areas to consider.
For nearly 100 years, railway passengers arriving at London Bridge station have seen the same prominent advertisement. Painted on the Grade II-listed building beside the track on Park Street, it reads "Take Courage," the motto of the Courage Brewery.
Often described as one of London's largest and most memorable "ghost adverts," it has no confirmed date of origin. The Anchor Brewery built the property in 1820, and brewing and other operations continued there until 1981, when the local authority acquired it. Similar faded adverts appear across London, a reminder that advertising has supported the UK economy for hundreds - possibly thousands - of years.
A brief history of advertising
London's oldest surviving adverts are no more than 300 years old, partly because much of the city has been rebuilt since then. Older examples have turned up elsewhere. Traders and market sellers in ancient Egypt and Mesopotamia used clay tablets and papyrus posters, while archaeologists have found stone adverts in ancient Babylon dating back 3,000 years. Evidence of similar advertising also exists in ancient Greece, Rome, China and throughout the Middle East.
In ancient Rome, business owners hired designers and makers to create signs for the street outside their shops. Those signs were the main way to advertise, and some people might call them the first step toward the advertising industry we know today.
Advertising moved forward again during the 16th century, when newspapers and magazines began to appear. Venice saw the first weekly gazettes in the early 1500s; Britain followed with its own weekly publications in the 1620s. Ads appeared in these printed publications from the start, helping cover printing and distribution costs. The industry did not begin expanding at the speed associated with modern advertising until the mid-1800s, when several forces came together.
Early print advertising appeared mostly in books because printers wanted to sell readers more of their own products. Patent medicines took up plenty of pages, too. The pattern shifted during the 1850s and 1860s. Mass production cut manufacturing costs, while a growing middle class emerged across the world - the first broadly prosperous class of its kind in modern history. With money left over after necessities, these consumers began seeking a wider range of new goods.
Technology advanced, health improved, and a wealthier middle class began demanding more, creating a windfall for companies able to benefit from those shifts. Some business owners moved quickly, using pioneering advertising to expand. Thomas J. Barratt, chairman of Pears Soap, was among the first executives to build a brand around a sustained advertising campaign. The campaigns he developed during the first few years of the 20th century earned him a reputation as one of the fathers of modern advertising in London. Barratt wanted Pears recognized as one of the country's finest soap brands, so he built advertisements designed to persuade people to buy it. His most memorable slogans included, "Good morning. Have you used Pears' soap?" He also ran adverts showing well-groomed middle-class children, tying the product to a comfortable home, social ambition, and everyday cleanliness. The strategy sold aspiration through an exclusive brand image, while a reliable supply chain kept up with demand.
Advertisement for Pears' Soap, 1890. Woman to chimney sweep: "Good morning! Have you used Pears' soap"
Companies on the other side of the Atlantic were taking much the same approach. During the 1890s, Procter & Gamble, Quaker Oats, and others used nationwide advertising to sell their products throughout the United States. Tobacco makers appeared especially often across every market.
During the first decades of the 1900s, local offices expanded into the first global advertising agencies. Advertisers also learned to shape campaigns across print, radio, and outdoor billboards. Psychologists entered the field during the 1920s, studying behaviourism and basic consumer emotions - love, hate, and fear - and refining the methods Barrett had pioneered in London a decade earlier. Lord and Thomas, a Chicago agency, made behavioural psychology central to its work. Founded in 1873, the firm is now called FCB and remains the third-oldest advertising agency still operating in the US. Albert Lasker bought it in 1912, then developed a copywriting method aimed directly at consumer psychology.
Lasker's campaign for Lucky Strike became one of his best-known projects. The company wanted more women to smoke, so he framed cigarettes as an alternative to high-calorie snacks, using the line "reach for a Lucky instead of a sweet." Lucky Strike's market share rose by more than 200% during the first year.
Undated Lucky Strike cigarette advertisement showing Rosalie Adele Nelson with the advice: "To keep slender, I reach for a Lucky instead of a sweet."
How the advertising industry became the money machine
Advertising spending has broadly followed global GDP growth for the past 100 years. The share differs by country: among major economies, the UK spends the most relative to GDP. Worldwide, though, the average has climbed from roughly 0.3% of global GDP in the 2000s to around 0.8% today. WPP estimates it could reach 1% by the end of the decade.
Despite its growth, the industry has long been criticized for wasteful spending and weak returns. The familiar line - "I know that half the money I spend on advertising is wasted. My only problem is that I don't know which half" - captures that complaint. It is usually credited to Henry Ford or to the founder of Unilever, who later became the first Viscount Leverhulme. Yet no evidence shows that either industrialist ever said it. Ford, if anything, strongly supported advertising: "A man who stops advertising to save money is like a man who stops a clock to save time."
The advertising business has changed dramatically since its early years, yet the principles established by its pioneers still hold: seize attention and deliver information plainly. The industry now breaks into two broad sides. One consists of companies that sell advertising space, a market led by four giants: Alphabet, which owns Google and YouTube; Meta, which owns Facebook; ByteDance, the Chinese owner of TikTok; and Amazon. Together, they generate around 60% of global advertising revenue throughput, compared with roughly 50% a few years ago. Each built its reach around digital platforms and creator content, turning a worldwide audience into a huge advertising business. Beyond those four, the rest of the top 25 global advertising sellers includes more traditional companies such as Fox, Walmart and JCDecaux.
The industry's second major part consists of agencies that develop advertising strategies and manage campaigns across different platforms. In the UK, WPP is the largest name in this group. The company began as Wire and Plastic Products, a manufacturer of wire shopping baskets, then shifted into advertising in the 1980s under Martin Sorrell. Today, WPP offers companies and organisations a single place to plan and deliver their public communications.
Coordinating campaigns and ad budgets has become far harder. The days when advertisers mainly worried about painting signboards are long gone. They now have a wide range of media to weigh, while generative search (AI) is growing faster than any other market. WPP Media's mid-year market forecast projects that generative search platforms such as ChatGPT will bring in £5.1 billion in global advertising revenue in 2026 - about 0.4% of all advertising revenue.
However, the media agency expects the market to expand at an annual compound rate of nearly 100% during the five years ending in 2031. That pace would make it the fastest advertising segment in recent years to reach £100 billion in annualised revenue. Traditional search - the ads shown with a Google search - needed 22 years to hit that mark. Social media platforms such as Facebook got there in 14 years, while annual spending on streaming TV services including YouTube and Netflix remains below £60 billion, even after rapid growth in viewing. Much of the advertising industry's expansion over the next few years is expected to come from generative AI platforms.
On August 07, 2026, a live performer appears inside a Netflix billboard above the Sunset Strip promoting "The Last House" in Hollywood, California.
Billboards are still holding their ground
AI-driven search appears to be helping one old advertising channel: out-of-home media. The term covers advertising placed beyond someone's own property, from modern roadside displays to the ghost signs scattered around London. It is one of advertising's oldest formats, yet spending has remained steady even as money leaves traditional channels such as television, print, and radio. WPP says the reason is simple: unlike digital platforms, an outdoor ad is almost certain to put its message in front of a person.
Earlier this year, machine-to-machine activity accounted for more than half of all internet traffic. AI agents fill out forms; bots "like" videos made by AI. That raises a practical problem: people may never see the ads advertisers paid to place. Out-of-home advertising puts a message in front of large audiences in physical settings at the same time, giving it a level of scale and visibility that social-media platforms increasingly find difficult to match.
Global Media is one of the UK's biggest operators in this market. The privately owned company runs more than 253,000 outdoor advertising sites nationwide and also owns radio stations. It works closely with the London Underground, while its billboards appear at major transport hubs across the UK and Europe. In its latest fiscal year, out-of-home advertising revenue climbed from 379.9 million to 425.9 million. Adjusted profit in the outdoor division rose 25%, reaching roughly 155 million.
A pedestrian passes an advertisement from the U.K. government's "Let's Get Going" campaign
JCDecaux (Paris: DEC) ranks alongside Global as a world leader in out-of-home advertising. Based in Paris, it holds about 12% of the global market - twice the share of its nearest rival. Europe contains 30% of its assets, compared with 8% in the US, 21% across Asia-Pacific, and 14% elsewhere. Street placements generate more than half of its revenue, while billboards contribute 13%. Public-transport advertising and placements near stations account for another 36% of sales.
Berenberg analysts forecast 5.5% growth this year, ahead of the broader market. Expansion in Asia and the US - where the portfolio has relatively little exposure - should drive it. Ebitda margin is a healthy 21.4%, but fixed costs account for about 60% to 70% of the group total, giving the capital structure considerable operating gearing. Debt sits near zero, and the Decaux family holds 66% institutionally, reflecting a cautious approach to management. The shares trade on a forward P/E of 15 and offer a 7.3% free-cash-flow yield.
The best advertising agencies to invest in
Five major companies dominate the advertising market: Publicis (Paris: PUB), WPP (LSE: WPP), Havas (Amsterdam: HAVAS), Omnicom (NYSE: OMC), and Dentsu (Tokyo: 4324).
Publicis (Publicis Groupe) logo of a French company is seen on a smartphone screen
Publicis is often regarded as the sector's strongest operator. Over the last five years, it has taken important contracts from rivals while attracting leading talent. The company has also invested heavily in data and consumer-identity capabilities, strengthening its position in digital advertising and its exposure to AI-driven growth. After a major restructuring and change in positioning, growth is picking up: Berenberg expects it to climb from about 2.2% in 2026 to almost 7% by 2028. Cash generation is strong as well. Publicis is expected to finish 2026 with roughly 1.7 billion in net cash, while the shares trade at a 10.3% free-cash-flow yield and a forward P/E of 11.
WPP once led the group. Now it trails the others by a wide margin. Since visionary CEO Martin Sorrell left in 2018, the company has struggled to regain its footing. Repeated job cuts, reorganizations, and rebranding have put the business under severe pressure. Revenue is expected to reach about 9.5 billion this year, compared with 11.4 billion in 2024. Still, signs of recovery appeared after Cindy Rose became CEO. One year into the job, the former CEO of Microsoft UK has stopped the losses from worsening. COMvergence data shows that WPP Media has secured around £3 billion in new business so far in 2026, against £2.8 billion in losses last year. Account retention now stands at 43%, up from 16% in 2025. Still, the company has not yet proved that its recovery is real. Analysts expect revenue to keep falling through 2028, while further job cuts are likely as management tries to generate more cash. Debt stands at about 2.5 billion, excluding leases, compared with Ebitda of 1.5 billion. Investors already seem to expect plenty of bad news: the shares trade at a forward p/e multiple of 4.9 and offer a 5.9% dividend yield. The stock's free cash-flow yield is 5.2%.
Investing beyond advertising's biggest tech sellers
Alphabet, Meta, and Amazon still sit at the top of the advertising market, but they are no longer the focused ad businesses they once were. Each is directing hundreds of billions of dollars in advertising revenue toward expanding its AI operations. That spending has changed the character of companies once known for high returns on capital and asset-light business models; they now look far more like capital-heavy infrastructure businesses. Even so, their lead in advertising remains clear. Together, Alphabet, Meta, and Amazon brought in £160.8 billion from ads in the second quarter of 2026, with Alphabet in front. Total ad revenue climbed 14.5%, driven mainly by the group's strength in AI-powered search. Search revenue increased 17%. YouTube's advertising revenue climbed 12.6% from the previous year, taking more money from television budgets along the way. Its annual ad sales now exceed the combined spending of established media companies including Disney, NBCUniversal, Paramount, and Warner Bros. Discovery.
Pinterest logo is seen displayed on a smartphone
Pinterest (NYSE: PINS) deserves attention beyond the biggest technology companies. Over the past decade, it has grown into one of the world's 25 largest advertising platforms, helped by its expanding library of user-created content. Users come to Pinterest for ideas - often around home decor or fashion - and the platform sends them toward retailers. More than half say they use Pinterest to shop. That gives brands a strong advantage as they increasingly rely on customer-created content to generate sales. User numbers have risen for 11 straight quarters, reaching 640 million, while revenue grew 18% in the second quarter. The stock has still struggled since Pinterest became a public company, falling 65% over the past five years. This year, free cash flow could reach about £1bn, compared with the company's £10.5 billion market cap. The balance sheet holds net cash, while management has already spent £2 billion on share buybacks. That makes the stock worth a closer look.
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