The U.S. media ad market is forecast to deliver a banner second half with total growth of 10.3% and it’s not just from the influx of massive spending from the 2024 elections. Magna is calling for full-year total “non-cyclical” advertising revenues to climb 8.9% for the strongest growth rate in 20 years, excluding 2021’s extraordinary post-COVID rebound. When the flood of $10 billion of ad sales around the Olympics and the elections are added in, Magna says total media ad sales will grow 11.4% (up from June’s +10.7% forecast) to hit $377 billion this year.
The new numbers are part of an upward revision to Magna’s 2024 outlook. The forecasting arm of agency giant IPG Mediabrands now says total “non-cyclical” advertising revenues grew roughly 11% in the second quarter. That's slightly stronger than its earlier forecasts and “shows no sign of slowing down following an equally strong first quarter,” says Vincent Létang, Magna’s Executive VP Global Market Intelligence and author of the new report.
There are other drivers behind Magna’s bullish outlook. The nation’s economic and business climate remains positive: GDP is growing 2.8%, inflation fell below 3% and unemployment is hovering around 4%. Based on the ad market’s strong first half and a positive economic outlook, Magna’s number crunchers are raising their full-year 2024 forecast for non-cyclical ad spend growth to +8.9% from the +8.2% predicted back in June. Magna says that marks the strongest non-cyclical ad market growth rate in 20 years, when excluding 2021’s extraordinary post-COVID rebound.
When the flood of $10 billion of ad sales around the Olympics and the elections are added in, Magna says total media ad sales will grow 11.4% (up from June’s +10.7% forecast) to hit $377 billion this year. That includes double-digit growth of 10.3% year-over-year in the second half of 2024.
Although Létang says non-political growth rates are “bound to slow in the second half due to tougher comps” — last year’s second half was “very strong,” he says — the staggering sums spent by Olympics and political advertisers will keep total ad revenue growth in high-single digits through the second half.
Digital Rockets Up 16%
It’s now practically boilerplate for ad forecasts to show digital outpacing traditional media. Digital pureplays, which include search, retail, social and short-form video, shot up 16% to $55 billion in the second half. The big three digital pure players — Amazon, Google and Meta — hoarded 80% of that total. And digital pureplays are on track to grow 13.6% (up from +12.9%) to $264 billion this year, roping off a 72% market share.
However, 2024 will be a growth year for traditional media, too. Magna’s updated outlook calls for 5.1% growth to $111 billion combined this year for cross-platform long-form video, audio, publishing, and out-of-home. The number includes political and Olympics spending.
Traditional media companies are deriving a growing percentage of ad revenues from digital formats. For radio and audio, that means digital investments are paying off. Magna estimates audio ad sales in the first half inched up slightly (+0.4% year-over-year) as digital sales of +6.9% were able to offset broadcast declines of -3.5%. Podcasts were in the high-single-digit- range in H1 and Magna expects them to stay there for the rest of 2024.
Magna’s outlook offers fresh motivation for sales teams to keep their focus on digital. For the full year 2024, audio ad sales are on track to grow 1% to $16 billion — including political and other cyclical dollars — as a +7% growth in audio streaming and podcasting will offset an erosion of -3% in broadcast radio ad sales.
Elsewhere on the traditional media landscape, non-cyclical national television sales will drop 1.7% to $36 billion. Broadcast and cable networks will fall 6.8% while streaming video sales will grow19.3% to $11 billion and account for nearly 25% of the total market. Non-political local TV sales will drop 3.9% to $17.3 billion, but total ad revenue will grow 25% when including political ad sales. Publishing ad revenues are poised to decline 3%, out of home is forecast to climb 5%, and digital media formats will all grow double digits this year.
‘Strong Organic Drivers’ In 2025
“We see that all ad market drivers are positive this year,” Létang says, explaining that the country’s economic outlook, along with organic and cyclical growth factors, are contributing to “strong growth overall.” Looking ahead to 2025, he foresees “a decent economic environment with strong organic drivers,” even without major revenue-boosters like an election or the Olympics. “As a result, we’ll see a moderate slowdown in non-cyclical ad spend” to +6.3% growth or $391 billion. That “will translate into a more significant slowdown for total media owners’ ad revenues” of +3.9% on a year-over-year basis in 2025.
Digital pure players will again drive the market, growing 9.3% to $289 billion next year, while traditional media owners will dip 1.5% to $102 billion. In a head-turning prediction, Magna says search/commerce and social media will shoot up 10%, and together account for two thirds of all advertising in the country.
National television sales will drop 2.7% in 2025, while local television sales will decline 3.6%. Outdoor sales will rise 5.2%, while radio sales will slip 0.8% and publishing sales decline -1.8%.
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