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2024 appears to be shaping up as a bright year for the ad industry.
Magna, the research arm of IPG Mediabrands, expects the US ad market for the year to grow 9.2% to about $369 billion, up from its previous forecast from December, which had predicted 8.4% growth. Ad-free streamers who?
A heavy chunk of that—about $9 billion—will come courtesy of the 2024 US election cycle, up 13% from the 2020 cycle, Magna forecasts. FWIW, eMarketer expects total political ad spend to hit about $12.3 billion, about triple the spend from 2016.
Flashback: The forecast would give anyone with a time machine a bit of whiplash. The ad industry’s growth skyrocketed 23% in 2021 after an uneven 2020, but it has since slowed, growing 7% in 2022, and 5.7% last year.
“In the first few months of 2023, everybody was wondering how bad it was going to be,” Vincent Létang, EVP of global market intelligence at Magna, told Marketing Brew. Instead, it closed the year with growth at 5.7%.
Recent economic growth forecasts and more stabilized inflation should “give confidence to marketers,” he said. “The worst is behind us.”
Who’s getting what? Magna expects digital platforms like Google and Meta to see their ad sales grow by 12% to $261 billion, accounting for about 72% of the market. Traditional media owners, including linear broadcasters and publishers, are expected grow about 3.5%. (If it wasn’t for the Olympics and the election, this category would contract 3%, Magna found.)
Streamers—including CTV, AVOD, and FAST channels—are also expected to see revenue grow 13%, driven by Amazon Prime Video’s advertising tier, which rolled out in late January.
Where’s it coming from? The ad spend is expected to predominantly come from retail and travel budgets, which are expected to grow 9%, and the food, drink, and automotive categories, which will grow 6%. The tech category, including software services, hardware, and social platforms, will grow just 1%, and entertainment will fall about 4%, Magna predicted.