A crack of optimism for 2024 ad spend forecasts

Chris Pash
By Chris Pash | 2 April 2024

A major forecaster sees a more upbeat advertising market ahead.

MAGNA, IPG’s insights unit, has lifted its estimate for growth of US advertising spend in 2024 because of an improving economic outlook and the momentum of digital media and streaming.

The latest analysis, based on media companies’ financials, smooths out the impact of the American presidential elections and of the Paris Olympics, both of which will boost ad spend in the US.

Non-cyclical advertising revenue grew by an estimated 9.1% in the December quarter of 2023, the strongest quarterly growth in almost two years, bringing full-year 2023 ad market growth to 5.7%.

And more growth is forecast for 2024. Total media owners ad revenue will increase by 9.2% to $US369 billion. That’s nearly one percentage point above the previous forecast of 8.4% made in December.

MAGNA expects non-cyclical advertising spending -- discounting the American elections and the Olympics -- to grow by 6.7%. 

“Several factors led MAGNA to increase its US ad market growth forecast,” said Vincent Létang, EVP global market intelligence.

“That includes an improved macro-economic outlook with GDP growth raised from 1.7% to 2.4% in the last few months, the momentum of digital media formats: social media, retail media, and streaming. 

“The latter is driven by a strong expansion in the reach and marketing opportunities offered by ad-supported streaming. That leads MAGNA to raise the non-cyclical growth forecast to +6.7%. 

“We are slightly reducing the forecast for cyclical spending (due to a slowdown in political fund-raising) but, overall, we now expect total media owner ad sales to grow by +9.2% this year (compared to +8.4% in our previous update) to reach $369 billion.”

The non-cyclical ad sales of traditional media owners (television, audio, publishing, OOH, and cinema) will fall by 3% this year (previous forecast -2.9%). 

However, cyclical events will primarily benefit traditional media channels. The election will boost local TV ad sales (+26%) and the Olympics will mitigate the erosion of national TV advertising. 

Including cyclical spending, traditional media ad revenues will increase by 3.5% to $109 billion.

In Australia, advertising spend won’t benefit from the US elections and the Olympics in Paris won't be the big lift to be experienced by the US because of time zones. 

MAGNA’s latest forecast for Australia puts total advertising revenue for 2024 up 3.8% to AUD27.7 billion. That forecast made in December was more upbeat than MAGNA's mid year prediction of 3% growth for 2024. 

Dentsu has a more moderate forecast of 2.3% for Australia in 2024, while GroupM in December was more downbeat, predicting 0.9% growth in 2024.

In the US, MAGNA’s latest forecasts show social media advertising growing 14% to $80 billion and long-form streaming advertising will expand by 13% to $10 billion.

Most industry verticals will grow ad spend in 2024 led by retail (+9%), travel (+9%), food and drinks, and automotive (both +6%). However,  MAGNA anticipates stagnating or declining advertising activity for entertainment (-4%) and technology (+1%).

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