Published on The Wall Street Journal
While the U.S. ad market in 2023 was ‘relatively resilient,’ the outlook for 2024 looks stronger, according to Magna
A major ad forecaster has increased its full-year forecast for U.S. advertising spending in 2024, pointing to an improving economic outlook and strong momentum in digital formats such as social media and streaming video.
Noncyclical growth will reach 6.7%, Magna said, raising its estimate from an earlier prediction of 5.9%.
Whereas last year had a “relatively resilient ad market,” the outlook for 2024 looks stronger, said Vincent Létang, executive vice president of global market intelligence at Magna and the report’s author, in a video presentation.
“Economic indicators have improved recently,” Létang said, citing economists’ increased forecasts for GDP growth since November. “Inflation continues to slow while the job market is strong. The only caveat is the tepid consumption trend in terms of retail sales and slowing automotive sales.”
Marketers in most categories will spend more on advertising in 2024 than last year, including retail, travel, food and drink, and automotive, according to Magna.
Entertainment advertising will stagnate or decline as the industry releases and advertises fewer than usual new shows and movies in 2024, partly as a result of the 2023 Hollywood strikes, Magna said.
And technology ad spending will continue its listless recent performance, with companies in the sector still stressing profitability and cost controls, according to Magna.
The 2024 election cycle, the Summer Olympics and in smaller part the Copa América soccer tournament will bring in $10 billion of incremental U.S. ad sales in 2024, Magna’s new forecast said. Political advertising spending is the largest contributor to that figure, expected to generate $9 billion in incremental revenue for media owners, though the 13% forecast increase in political ad sales over the previous presidential cycle reflects a reduction from Magna’s previous forecast of 18%. That is due to a slowdown in political fundraising in January and February and could be potentially tied to a lack of primary competition for either party this year, Magna said.
“But there is still time for political fundraising and spending to recover and surpass the 2020 tally. In the 2020 cycle, 75% of total funds were raised from March,” Magna’s report said.
