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Magna, the research arm of IPG Mediabrands, raised its forecast on ad spending for this year and next thanks to a rise in digital advertising spend, as well as slowing inflation coupled with a rosier economic outlook.
Overall, Magna expects US ad sales to reach $337 billion this year, a 5.2% uptick. This analysis excludes cyclical events like next year’s presidential election and the Summer Olympics. In June, Magna predicted 4.2% domestic growth.
Next year, Magna expects total domestic ad spend to jump 5.6%, also excluding cyclical events, up from a previous 5% forecast. “It’s the first time we’ve raised the expectation in three or four updates. It might be a turning point,” Vincent Létang, Magna’s EVP of global market intelligence, told the Wall Street Journal.
Digital media ad spend is forecast to jump 9.6% this year, driven by rising retail media spend. However, spending across traditional media is predicted to decline: This year, Magna expects it to drop 3.6%. In 2024, it anticipates national and local TV ad sales will be down 3% and 5% respectively, excluding cyclical events. This may be in part due to the Hollywood strikes, which are stifling scripted content and could force advertisers to look for eyeballs elsewhere.
Magna’s bright outlook comes after the advertising industry spent the past few years preparing for a recession as many sectors, particularly tech, cut ad spend and conducted layoffs. Still, “We’re not out of the woods yet,” Létang told the Journal.
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