US ad forecast raised to 5.6% growth for 2024

U.S. ad industry revenue should increase a bit more this quarter and year than previously expected thanks to improved economic conditions and forecasts, Madison and Wall’s Brian Wieser said in a new report. The industry analyst now expects 5.6% growth in 2024, up from a prior 5.2% annual growth forecast. First-quarter ad industry revenue should rise 8%, Wieser said, up from his prior forecast calling for 7% growth. Check out the latest Ad Age events and award programs The annual and quarterly expectations exclude political advertising, which Wieser now expects will hit $15.5 billion across all media this year, up from $14.1 billion in 2020. In September, he anticipated political ad spending would rise to $17 billion in 2024. Wieser’s upbeat outlook for the overall market stems from significant improvements in future economic expectations. Recent data show a nearly 1% increase in real GDP forecasts for 2024, compared to previous estimates. Wieser, however, calls the opportunity and risk associated with Chinese exports a “double-edged sword” that presents both opportunity and risk for the ad market in 2024 and beyond. Social and commerce media fuel growth in digital advertising Digital advertising should account for 76% of all advertising spending in 2028, up from 64% in 2023, Wieser predicted. He forecasts first-quarter digital ad revenue growth of 14.2%, excluding political advertising. For 2024, Wieser anticipates 10.7% growth in digital ad revenue excluding political advertising—that’s down from 12.9% growth in 2023. Commerce media and social media are expected to lead this growth. Wieser expects commerce media, which appears poised to capture a larger portion of marketers’ budgets in industries such as packaged goods, electronics and apparel, to double in size from its 2023 level, reaching $82 billion in ad revenue by 2028. Social media is expected to grow 14.5% in the first quarter and 11.7% this year, with a potential slight boost from political advertising. More: Inside Reddit’s strategy to recruit advertisers TV’s declines continue—except in CTV Television advertising is expected to continue its downward trend, particularly in national TV, facing challenges such as cord-cutting and reduced ad inventory, with Wieser projecting declines of 3.5% in the first quarter and 3.2% this year. The Summer Olympics, however, could prop up the results, as the Games retain much “if not more” of the appeal they’ve always had to advertisers, he wrote.Read more: NBCU’s biddable Olympics Meanwhile, local TV, excluding political advertising, should fare worse than national TV in 2024, Wieser said. Connected TV is expected to grow 18% this quarter and this year and should approach $20 billion in annual ad revenue, accounting for 29% of all TV advertising, Wieser predicted. “Notably, while I expect that Amazon’s new ad-supported offering will generate a lot of revenue for Amazon, I expect their gains will primarily come at the expense of other owners of traditional TV ad inventory,” he wrote. Outdoor advertising is expected to grow around 4% annually, while audio advertising is expected to decline by 1% to 2% per year. Mid-single-digit declines are expected in publishing, though there could be exceptions when media owners confident in their properties make “meaningful long-term, growth-focused investments,” Wieser wrote. Declining trends are expected to continue in both direct mail and directories, he wrote. Top marketers, brands and agency ventures Ad Age Datacenter’s definitive rankings of the biggest U.S. and global advertisers and agency companies Click here

US ad forecast raised to 5.6% growth for 2024

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