Published on Forbes
Ad agency Magna Global issued its latest ad spending forecast revising totals for both 2023 and 2024. For 2024, Magna expects year-over-year global ad spend will grow by 7.2% surpassing $900 million. In the U.S., benefiting from such quadrennial events as the Presidential election and Summer Olympics, ad spending will increase 8.4%. Once again, ad spend growth will be led by digital media. Below are some of the forecasts.
Globally (including U.S.): Next year, Magna forecasts ad spend to increase by 7.2%, totaling $914 billion. Driving the increase will be economic stabilization, lower inflation, digital innovation and such cyclical occurrences as elections and major global sporting events. Leading ad spend growth for 2024 will be “pure-play” digital media, forecast to increase by 9.4%. Driving the digital growth will be ecommerce and retail media. On the other hand, year-over-year, traditional media (television, audio, publishing, out-of-home), will grow by a more modest 2.2%.
This year, Magna reports, globally net ad revenues reached $853 billion, a 5.5% increase from the previous year. The pace of ad spend growth quickened in the latter half of 2023 at +6.3%, compared to +4.7% during the first six months.
In 2023, global ad spending of traditional media, when compared to the previous year, declined by 4%, totaling $266 billion. Magna cites economic uncertainty as one reason for the drop-off. On the other hand, in 2023, the ad spending for digital “pure-play” reached $587 billion, a year-over-year increase of 10.5%. The increase in ecommerce and retail media were instrumental in the growth. Globally, 69% of ad spending are allocated to digital media.
Looking at digital media segments, in 2023, Magna reports keyword search continues to be popular generating nearly $300 billion worldwide in ad spend. Social media, led by Meta and TikTok, grew by 15.2% in 2023 and totaled $182 billion. Meanwhile, short-form video platforms such as YouTube and Twitch, grew 9% to $70 billion.
Among individual markets, Magna reports India had the largest year-over-year increase of +12% reaching $14 billion. China, the second largest advertising market with ad spending of $152 billion, had an increase of 9.8%. The year-over-year ad growth in Germany and the United Kingdom was not as robust, at +2.5% and +3.9%, respectively.
United States: The U.S. is the largest advertising market. For 2024, in the U.S., Magna forecasts a year-over-year growth of 5.9% for non-cyclical ad spending. When cyclical events are included (i.e., Paris Olympics and political), year-over-year ad spend will increase by 8.4%. Magna projects in 2024 political ad spend will approach $10 billion. The latest ad projections are a slight increase from Magna’s previous ad spending forecasts, reported earlier in the year.
In 2023, Magna projected the U.S. ad market to grow year-over-year by 3.6%, reaching $338 billion. For non-cyclical events (elections, global sporting events) the U.S. ad revenue was up 5.4% compared to 2022.
In 2023, the ad spend increase came from digital media; social at +14% and search/commerce at +10%. Among traditional media, only out-of-home and cinema grew their ad spend compared to last year. Out-of-home had a modest increase at +2%, with cinema at +12%. Meanwhile, local television had the sharpest year-over-year drop-off at -22%, followed by publishing at -7% and national TV at -6%. National TV segments AVOD, FAST and CTV, however, grew by 12%, while linear TV was down at -8%. Lastly, ad spend for audio and direct mail were both at -4%.
Product Categories: Next year, among the fastest growing product categories is expected to be automotive (especially in the U.S.). The category has recovered from supply chain issues and the growth of electric vehicles. Travel, benefiting from greater demand and pharmaceuticals, with an aging population and new products coming to market, will also have strong increases. Additionally, consumer packaged goods (CPG) and fast-moving consumer goods (FMCG) such as food and drink, aided by lower inflation, retail media and global sporting events will have increases. Also, next year, political ad dollars will grow with elections in the U.S., Mexico and India.
Conversely, the entertainment category, despite the potential of AmazonAMZN +1.4% Prime launching an ad supported tier, will not be as strong. The vertical, recovering from the Hollywood shutdown caused by labor disputes, will have a decline in the number of movies released and fewer U.S. television programs. Also, ad spending growth for betting may be hindered in some European markets by regulatory restrictions, despite a busy year for sporting events.
