What recession? Magna just raised its ad forecasts for 2019 and 2020.
Media net advertising revenue will grow 4.1 percent in 2019 and 6.2 percent in 2020, according to the fall update of ad forecasts from Interpublic Group of Cos.’ Magna.
That is an upward revision from June, when Magna forecast growth of 3.0 percent in 2019 and 5.8 percent in 2020.
Vincent Létang, Magna’s executive VP of global market intelligence and author of the report, voices optimism that the U.S. ad market will keep climbing in 2020.
“We forecast an 11th year of growth in 2020 as record political spending will generate an all-time high of $5 billion in ad revenue and mitigate the effect of the expected economic slowdown,” Létang said in a statement.
The report says gross domestic product, a measure of the overall economy, “is forecast to slow down only mildly” to 1.9 percent in 2020, from 2.3 percent in 2019. “But the good news for the media sector is that personal consumption—according to Magna research, the economic indicator best correlated with advertising spend historically and most responsible for the 2018-2019 heights—is expected to remain very strong next year,” with growth of more than 4 percent in consumer spending.
“Nevertheless, Magna is expecting the economic slowdown might take a toll on the spending in several key verticals (e.g. automotive, retail, finance), but fortunately, 2020 is the strongest year in the four-year cycle of events that typically drive extra ad spend and incremental ad revenues,” according to the report.
Magna forecasts 2020 U.S. net advertising revenue of $235.4 billion, up from $221.6 billion in 2019. The 2020 tally includes a $5.9 billion ad revenue windfall from cyclical events (political spending and Olympics).