By Michael Bürgi • September 16, 2024 •
Ivy Liu
IPG’s Magna unit, whose market intelligence arm regularly forecasts media spend across all media, just upped its predictions for U.S. media spend in full-year 2024, based on strong actual revenue for the first half of the year.
The agency group now expects full-year “non-cyclical ad spend,” which means not including the Olympics or political spend, will grow by 8.9% to $377 billion, one of the best performances in decades. Earlier this year, Magna was predicting 8.2% growth.
When adding in cyclical spend — and 2024 is shaping up to be a banner year for political advertising with Kamala Harris replacing incumbent president Joe Biden as the Democratic nominee earlier in the summer — Magna is predicting growth in U.S. ad spend of 11.4%. That represents an expected $10 billion in incremental ad revenue to reach $377 billion, due to the elections and summer Olympics.
Vincent Létang, Magna’s evp of global market intelligence and author of the report, credited the increase in spending estimates to a strong second quarter, which grew 11% based on his team’s analysis of media companies’ financial results.
“When we look at the economic and business environment for the rest of the year, the outlook remains positive, with GDP growing 0.8%, inflation now below 3% and unemployment staying around 4%,” explained Létang, who cited strong demand from brands in a stable economy, and supply-side innovations including the rise of ad-funded streaming and retail media. “The non-political growth rates are bound to slow in the second half due to tougher comps, specifically a very strong second half in 2023.”
Digital, of course, is where much of the growth is happening, and Magna’s analysis pointed to Google, Meta and Amazon as attracting 80% of all digital ad dollars in the U.S. Despite the aforementioned tough comps to second half ’23, Létang said he expects them to continue their strong growth rates, with percentages in the teens.
Magna’s Mike Leszega, the company’s vp of global market intelligence, analyzed other media performance for H2 2024, and found that streaming TV’s growth will more than offset a slide in ad spend on linear TV. National video ad sales in total are forecast to round out at -1.1% to around $11 billion, “the best performance in two years,” noted the Magna report.
Leszega cited 19.3% growth in ad-funded streaming, driven largely by the introduction of ads on Prime Video since January, which nearly offset the long-term erosion of linear ad revenue, which is down almost 7%. In linear, local TV is benefiting hugely from the political season, and is expected to end 2023 up 25% in ad revenue.
In the meantime, Leszega predicted other media stats: Audio (which includes terrestrial radio) will be down 3.3%, publishing will drop by 2.7% and out of home in total will grow 5.3%.
Finally, Létang and his team expect 2025 to continue the run of solid growth, when excluding the cyclical events that have pumped media’s coffers considerably this year. Magna forecasts 6.3% non-cyclical growth in 2025 to $391 billion — but when compared to political/Olympic revenue, that growth will shrink to only 3.9% above 2024.
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