With one of the closest presidential races in recent history, campaigns and political groups are investing unprecedented sums in advertising. Magna, the forecasting arm of agency giant IPG Mediabrands, says U.S. political advertising will reach “new heights” this year, calling for an 11% increase in election ad sales over the 2020 presidential cycle to generate a record $9 billion in incremental media revenues.
That’s an upward revision from the shop’s June political forecast and it’s sparked by a reacceleration in Democrat fundraising right after President Biden dropped out of the race and endorsed Vice President Kamala Harris. Donations have since flooded into the Harris/Walz campaign, and total fundraising monitored by the Federal Election Commission is once again above 2020 levels.
Huge swaths of the ad spend will, once again, concentrate in a small number of swing states, meaning it’s an opportune time to own TV or radio stations in Pennsylvania, Michigan, Wisconsin, etc. “In these battleground states, the extra demand will temporarily squeeze supply and cause raising airtime costs for non-political advertisers,” Magna says in an updated total ad forecast.
Vincent Létang, Magna’s Executive VP Global Market Intelligence and author of the report, says local TV and digital media will again capture most of the political advertising windfall. The former will cordon off 60% of the pie while the latter will grab 25%. Magna’s forecast doesn’t give a percentage for audio/radio.
The other major cyclical event that boosted ad revenue this year was the Paris Olympic Games. After the COVID-addled Tokyo Games, Paris 2024 brought back the Olympic magic for athletes, fans, and advertisers. Coverage of the games boosted NBCU ratings by 300% for the 17 days of the event, vs. the same period in 2023. The Comcast-owned network hauled in $1.5 billion in total Olympics ad sales, up about 20% vs. Tokyo. Approximately $400 million came from digital and streaming properties, and $1.1 billion from linear TV.
Political and Olympic advertising have boosted an already strong U.S. ad market, which is forecast to deliver a banner second half, Magna says in an upward revision to its 2024 outlook. It is calling for total “non-cyclical” advertising revenues to climb roughly 11% in the second quarter. That’s slightly stronger than its earlier forecasts and “shows no sign of slowing down,” Létang says.
In this positive economic environment, several industry verticals showed double-digit increases in total ad spending in the first half. Among them are Finance/Insurance, which posted all-media growth of 24% year-over-year, and Automotive, which hit the gas pedal to the tune of +22%. Magna says Technology brands increased ad spend by +8% for the first time in years. And that may well continue. The revised forecast says such AI-powered products and services as Google’s Gemini and Microsoft’s Copilot may contribute to boosting ad spend “as several big tech players seek to dominate a very competitive AI space.”
This year wasn’t without its share of advertising laggards. So far, it’s the travel industry that’s cut back the most after plateauing this year following huge growth post-COVID. Pharma is also lagging last year on a total media basis, up just +1% overall but growing 6% in national TV. Magna doesn’t say how Pharma is doing on radio, but the category has been on an airwaves growth curve. For example, Pfizer’s surging spot count continued during the week of Sept. 2-8 and propelled the pharmaceutical giant into the No. 1 spot on the weekly Media Monitors list of top radio advertisers. Additionally, Magna says the Olympics boosted consumer packaged goods verticals (esp. drinks and personal care) in the third quarter.