Magna predicts stronger US ad sales growth in 2023 and 2024

Magna has increased its forecast for all-media ad spend in the U.S. for 2023, citing a better economic outlook and continued growth in digital ad formats. The IPG Mediabrands agency now predicts 2023 U.S. ad sales to increase 5.2% excluding cyclical events, up from the 4.2% it predicted in June. Including cyclical events, Magna expects 3.4% growth this year, up from its June forecast calling for 2.5% growth. Ad Age Media Summit Hear from industry leaders during October event in NYC Register here Magna also raised its U.S. ad spend forecasts for next year. Excluding cyclical events, it now expects 5.6% growth in 2024, up from a prior 5% forecast. When including cyclical events such as the Summer Olympics and the presidential election, Magna now expects an 8% jump in ad spending next year, higher than the 7.3% forecast it gave in June. More: Analyst predicts 8.1% growth in 2024 with election boost Brightening economic conditions such as slowing inflation and a 2.4% increase in national GDP have Vincent Létang, head of global market intelligence at Magna, cautiously optimistic. “Lower inflation fuels the recovery of consumer confidence, but the main concern that may hinder brand marketers’ willingness to invest in advertising is the weakness of retail sales, which were essentially flat between April and June,” Létang said. “That’s something we have to watch.” Ad spend varied across verticals, with travel, pharmaceutical, retail and consumer packaged goods brands seeing an increase in the second quarter of 2023. Spending for CPG brands grew 16.5%, a “surprising” recovery that Létang attributes to the slowdown in inflation. However, even including digital formats, year-over-year ad spend in the finance and technology sectors fell 3.1% and 8.1%, respectively, in the second quarter. See all of Ad Age’s 40 Under 40 honorees here While overall ad spend was up, most of the dollars spent in the second quarter were in digital ad formats, with digital posting an 8.7% increase in spend for the quarter. Magna now expects digital media owners such as Google, Meta and Amazon to see a 9.6% increase in ad sales for the year compared to its 7.9% forecast from June. By the end of 2024, Magna predicts digital pure-player ad spend to account for 70% of all ad spend. Recent news: X turns to Google for programmatic ads Finally recovering from the 2022 disruption stemming from Apple’s iOS 14 privacy changes, social media ad spend is expected to grow 13.4% in 2023 and 10.9% in 2024, while short-form digital video including YouTube and Twitch are expected to grow 5.9% in 2023 and 9.1% in 2024, Magna said. Ad Age A-List & Creativity Awards Final deadline approaching for annual program Enter here Conversely, ad revenue for traditional media owners will continue to slow in the coming years. Magna predicts a 3.6% decrease in ad sales for traditional media for the year, bolstered only by the Summer Olympics and upcoming election, which should help local TV to grow ad revenue by 28% in 2024. “The ad revenues of traditional media owners continue to stagnate or decline, despite the fact that their digital formats are doing well,” Létang said. “But so far, the growth and success of their digital formats is not enough to offset the long-term decline of traditional linear formats in audience and in ad sales.”

Magna predicts stronger US ad sales growth in 2023 and 2024

Featured Stories