KEY FIGURES

• The US Ad Market will grow by +9% this year to reach $369 billion.
• Social Media advertising will grow by +14% to reach the $80 billion milestone.
• Long-Form Streaming advertising will expand by +13% to reach $10 billion milestone.

KEY FINDINGS

• Based on MAGNA’s analysis of media companies’ financials, non-cyclical advertising revenues grew by +9.1% in the fourth quarter of 2023 e., the strongest quarterly growth in almost two years, bringing full-year 2023 ad market growth to +5.7%.
• Because of an improving macro-economic outlook, the momentum of digital media and streaming, and the impact of cyclical events, MAGNA anticipates more growth in 2024: total media owners ad revenues will increase by +9.2% to reach $369 billion. That’s nearly one percentage point above the previous forecast (+8.4% in Dec. 2023).
• Most industry verticals will grow ad spend in 2024 led by Retail (+9%), Travel (+9%), Food & Drinks, and Automotive (both +6%). On the other hand, MAGNA anticipates stagnating or declining advertising activity for Entertainment (-4%) and Technology (+1%).
• Advertising spend around major cyclical events will drive approx. $10 billion of incremental ad sales as the 2024 election cycle will generate $9 billion of additional ad revenue for media owners (+13% vs the 2020 cycle). This will add 2.5 percentage points to the non-cyclical growth rate, bringing total revenue growth from +6.7% (non-cyclical ad sales) to +9.2% (total ad sales). The impact will be even greater for some media categories like Local TV (excluding political -4%, including political +26%).
• Digital pure players will capture most of the market growth in 2024, with non-cyclical advertising sales growing by +12% to $261 billion (a 72% market share) while the advertising revenues of traditional media owners will grow by just +3.5% (as the influx of cyclical dollars offsets a -3% decline in non-cyclical ad sales).
• Several media channels will outperform in 2024. Premium long-form streaming (CTV, AVOD, FAST) will expand ad sales by +13% this year, driven by the introduction of advertising on Amazon Prime Video, to reach the $10 billion milestone (22% of total national TV). Social Media advertising will also grow by +13% while the ad sales of Search/Retail formats will grow by +12%.

Vincent Létang, EVP Global Market Intelligence and author of the report, said: “Several factors led MAGNA to increase its US ad market growth forecast. 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 2024 OUTLOOK IS IMPROVING…

Macro-economists are more optimistic about the economy in 2024 than they were a few months ago. In the Philadelphia Fed’s latest report, released in February, economists increased 2024 real GDP growth expectations from +1.7% (November update) to +2.4%. In fact, the economic consensus on 2024 GDP growth has now increased in the last three updates, from a mere +1% back in May 2023. Other macro indicators are generally encouraging too.

Economists expect consumer price inflation to slow down to 2.5% (incl. food & energy) from 9% mid-2022 and still 3% and 4% in January and February. Slower inflation contributed to a significant improvement in consumer sentiment in the last three months. The University of Michigan index stood at 77 in March 2024, compared to 50 in mid-2022 (when inflation peaked) and only 61 in November 2023.

… BUT INDUSTRY VERTICALS ARE A MIXED BAG

In 2024 MAGNA still believes most verticals will grow all-media ad spend including Retail (+9%), Travel (+9%), Food & Drinks, and Automotive (both +6%). CPG companies (Food, Drinks, Personal Care) benefit from the stabilization of production costs and consumer prices, while Automotive marketing is still driven by the transition to electric vehicles.

On the other hand, MAGNA anticipates stagnating or declining advertising activity for two large verticals: Entertainment (-4%) and Technology (+1%). The Entertainment industry (including theatrical studios and streaming platforms) will release and advertise fewer-than-usual new shows and movies due to the 2023 Hollywood strike delaying production, as well as cuts in production volumes as media companies focus on controlling costs. The Technology industry is also focusing on profitability and cost control, as innovation and sales slowed down in recent years.  Consumers are not upgrading smartphones as frequently as they used to, and developing new technologies like VR sets are far from reaching mainstream adoption.

Most of the spending growth will fuel digital media formats (for Retail and Auto in particular), while linear media spend will be flat or down for most verticals. In fact, only two verticals – Pharma and Travel – are expected to grow linear media spend.

AD MARKET FORECAST RAISED TO +9.2% (+6.7% EXCL. CYCLICAL)

In this economic and business environment, MAGNA expects non-cyclical advertising spending to grow by +6.7% this year as media owners’ ad revenues reach $360 billion. This is almost a percentage point increase from MAGNA’s previous forecast of +5.9% in the December 2023 report. Including cyclical spending, total media owners’ ad revenues will grow by +9.2% to $369 billion.

Digital pure players (DPP) dominating Search, Retail, Social and Short-Form Video formats will once again capture most of the growth, with DPP ad sales growing by +11.7% to $260 billion (previous forecast +10.5%).

Meanwhile, the non-cyclical ad sales of Traditional Media Owners (TMO: television, audio, publishing, OOH, and cinema) will decline by -3.0% this year (previous forecast -2.9%). Luckily for TMOs, the 2024 cyclical events will primarily benefit traditional media channels: the election cycle will boost local TV ad sales (+26%) and the Olympics will mitigate the erosion of national TV advertising. Including cyclical spending, TMO ad revenues will therefore increase by +3.5% to $109 billion.

Digital Pure players: +12%

Short form, pure player digital video ad sales (primarily YouTube and Twitch), will grow by +12% this year to reach $22 billion.

Social media sales will feel the wind at their back and will rise +14% to $81 billion. Artificial intelligence (AI) is becoming an increasingly important tool used by advertisers to set up, run, and optimize their social media campaigns. MAGNA looks for this to drive additional sales in 2024, especially for small businesses setting up their first campaigns.

Search/Retail ad sales will increase by nearly +12% to $146 billion in 2024 and will also benefit from increasing AI functionality in helping brands set up and run new advertising campaigns. Furthermore, keyword search formats continue to benefit from the rise of product search on retail media networks, which grew by +21% yoy in the fourth quarter of 2023. Amazon dominates but Wal-Mart, Target, and other brick-and-mortar retailers are making inroads. Retailers are now entering the streaming video marketplace to branch out from Search formats. For example, the new Walmart+ subscription included Paramount+, and the retailer is about to enter the Connected TV space with its acquisition of Vizio for a reported $2.3 billion.

TRAD. MEDIA OWNERS: +3.5% (-3% EXCL. CYCLICAL)

Non-cyclical national TV ad sales (including linear networks and AVOD on premium long-form streaming) will decline by nearly -5% to $44 billion this year, as the growth in streaming ad sales (+13%) will not fully offset the continued decline of linear ad sales (-9%). Linear TV continues to struggle from eroding reach and poor ratings. This is despite the resilience of sports and tentpole events so far this year and eroding pricing power as brands diversify their video budgets towards streaming and digital media. However, when including cyclical spending, total cross platform ad sales will drop by just -2%, thanks to incremental viewing and ad spending around the Olympic games (approx. one billion dollars).

Premium long form streaming ad sales will reach the $10 billion milestone, or nearly a quarter of total national TV ad sales (22% of $44 billion), further boosted by the launch of advertising on Amazon Prime Video in January. Amazon Prime will generate approx. 2.6 billion viewing hours per quarter in 2024, of which – MAGNA assumes – the bulk will be ad-supported from February onwards. That alone will expand the volume of streaming ad impressions by at least 8% in 2024. With the introduction of advertising on Amazon Prime Video, all the leading streaming platforms except AppleTV+ are now offering an ad-supported tier.

Elsewhere, local TV/video ad sales will increase by +26% to $23 billion this year thanks to the election cycle, more than offsetting a drop in -3.5% in non-political sales, hit by a slowdown in the Automotive vertical. Audio ad sales (terrestrial and satellite radio, audio streaming, and podcasting) will be stable at around $16 billion in 2024. Digital audio usage and ad sales continue to develop but growth rates are maturing (+6%), which means it barely offsets the erosion of linear radio (-3%). One major media owner, Audacy, voluntarily declared Chapter 11 Bankruptcy protection at the beginning of the year. OOH ad sales are expected to re-accelerate by +5% and close in on the $10 billion mark, driven by the digital OOH sales (+9.5% to $3.1 billion). Direct mail ad sales will see low single digit declines of -4% in 2024, though the channel has remained very resilient in the face of recent deep cuts to some local media channels.

CYCLICAL EVENTS: $10 BILLION OF INCREMENTAL AD SALES

Three cyclical events will generate additional ad spend and incremental ad sales in 2024: the election cycle, the Summer Olympics and – to a smaller degree – the Copa America soccer tournament. Political advertising spending is by far the largest cyclical booster, and it’s expected to reach new heights this year. MAGNA is forecasting a +13% increase in political ad sales over the previous presidential cycle (2020) to generate $9 billion in incremental media owners’ revenues.

The 13% growth forecast is, however, a reduction from our previous forecast (Dec. 23: +18%). This is because political fundraising has slowed in January and February. According to the Federal Election Commission (FEC) total fundraising by end-February 2024 was -11% than four years ago at the same stage, possibly because of the lack of real primary competition in either party this year. But there is still time for political fundraising and spending to recover and surpass the 2020 tally. In the 2020 cycle 75% of total funds were raised from March.

A 11-minutes video presentation of this research is available here. The next MAGNA Ad Forecasts (US and Global) will be published in June 2024.

Authentic connections and transparency elevate influencer trust and drive brand engagement according to new study from Snapchat and MAGNA Media Trials

New York, February 22, 2024 — With media spend on the global influencer market expected to approach $6 billion in 2024, a new research report released today by Snapchat and MAGNA Media Trials revealed how content creators and brand-sponsored content could push the industry even further. The robust study called “Unleashing Influence: A Marketer’s Guide to Influencer Success” explored users’ perceptions and preferences across five countries including Australia, France, Saudi Arabia (KSA), The United States of America (USA), and the United Kingdom (UK). The inclusive group of participants in the study, from different generations and diverse demographics, shared thoughts on influencers and how they feel about brands sponsoring influencer content on social media.

“Creators come to Snapchat because they’re able to build relationships with our community by showing a unique, authentic look at their lives. Authenticity is what draws Snapchatters to our platform to connect with the creators they care about, and this creates an environment that drives brand trust and consideration,” said Alexander Dao, Global Head of Agency Development & Sales Partnerships, Snap Inc. “In fact, 91% of Snapchatters are receptive to brands sponsoring creator content, demonstrating the power of genuine connections with creators on Snapchat.”

The results showed users were highly receptive to brand-sponsored influencer content, with an average of 87% receptiveness, and this was true for Gen Z, Millennials, and Gen X participants, all of whom were over 80% receptive. And they were on social media primarily to follow influencers (61%). Engaging with products, especially tutorials and reviews, was a significant driver of content views in all markets. In KSA, restaurant reviews (116) indexed slightly higher than tutorials (115) for most consumed content, unveiling an area of opportunity around experiences for local marketers.

Whilst social media users proved to be receptive and actively engaged with influencer content, there was also a clear imperative for brands to use certain criteria to align with the right influencers on the right platforms. Chief amongst those criteria was trust. Most participants surveyed responded they found influencer content to be only “somewhat” (55%) or not (16%) trustworthy. In fact, when it came to product research in high stakes industries, users trusted influencers less than brands – finance (-24%), apparel (-8%), and skincare (-3%) – as a source of information.

“We are excited that our research findings can help to empower brand marketers and media planners even further as they tap into this sizable opportunity for influencer content,” said Kara Manatt, EVP of Intelligence Solutions at MAGNA. “Across social platforms and geographic markets, there is a measurable impact and appetite for brand-sponsored influencer content to drive brand reputation and awareness at the top of the funnel, as well as the bottom line.”

Honesty was the #1 trait (67%) that brands could seek from influencers to drive engagement in brand-sponsored content, more than creativity (47%) and charisma or “rizz” (38%). Creators who routinely shared personal experiences (58%) and engaged with their audience’s comments (56%) fared well on being perceived as honest and authentic. Transparency went together with trust across countries. Brand-sponsored content should be clearly identified as such, especially if you are in Australia where 92% of research participants ranked this as very to somewhat important. Moreover, transparency about sponsorship increased the likelihood of brand engagement (+63%).

In the USA an additional content viewing experience was shown to participants on a platform that they regularly use. This line of inquiry presented insights on aligning purpose and platform to get the most out of brand-sponsored content partnerships with influencers. Of the users who were on Snapchat, on average 57% used the platform to keep tabs on their favorite creators’ daily lives. They divulged that Snapchat creators “felt like a friend” (55%), which dovetailed with the data on how users engaged with Snapchat as compared to other platforms (nearly 60% use Snapchat to connect with friends and family). This natural alignment made the content and influencer come across as trustworthy and authentic, which led to positive outcomes for the brand including +51% interest in researching the brand and +49% product purchase intent.

Additional Key Takeaways:
– Brand marketers can build trust by working with influencers who are authentic and create connection with their audience through effective behaviors such as talking about their mistakes and lessons learned (60%), providing evidence and facts about their topics (58%), and openly sharing their real lives not just curated lifestyles (57%).

– Transparency is a must for brand/influencer partnerships. Customizing content disclosures for the audience goes a long way – US users prefer voiceovers (28%), users in France prefer to read captions (28%), and hashtags work well in Australia (25%), KSA (30%), and UK (26%).

– Different platforms serve different purposes, from building community to exploring interests, and brands could better connect with target audiences by strategically aligning their products and brand-sponsored influencer content with their preferred platform.

– Marketers can position influencers as trusted partners for audiences in their brand decision making journey, and this can be amplified on platforms like Snapchat where brands can lean into users’ attraction to personal connections.

To read the full Media Trials report, please visit the MAGNA website and click the link here.

Methodology:
The “Unleashing Influence: A Marketer’s Guide to Influencer Success” study was conducted in Australia, France, Saudi Arabia, United Kingdom, and The United States of America with 5,214 participants across a representative group of social media users aged 16-49 years. The groups were approximately equal size in all countries. Participants in the online panel self-reported using social media on a weekly basis. They were surveyed to gauge current perceptions of influencer content and receptiveness to brand-sponsored influencer content on social media. The U.S. participants also provided feedback about influencer content across platforms.

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About MAGNA
MAGNA is the leading global media investment and intelligence company, and part of the IPG Mediabrands network. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers. We are a team of experts driven by results, integrity, and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity, and enablement. For more information, please visit our website: https://magnaglobal.com/and follow us on LinkedIn.

About Snap Inc.

Snap Inc. is a technology company. We believe the camera presents the greatest opportunity to improve the way people live and communicate. We contribute to human progress by empowering people to express themselves, live in the moment, learn about the world, and have fun together. The Company’s three core products are Snapchat, a visual messaging app that enhances your relationships with friends, family, and the world; Lens Studio, an augmented reality platform that powers AR across Snapchat and other services; and its AR glasses, Spectacles. For more information, visit snap.com.

Media Contacts:
Suzette Meade
MAGNA / IPG Mediabrands
[email protected]

Ahrim Nam
Snapchat
[email protected]

Research from MAGNA Media Trials and PatientPoint shows consumers prefer to see educational messaging at the doctor’s office versus other channels

NEW YORK & CINCINNATI, February 15, 2024 – MAGNA Media Trials and PatientPoint released a research study, “Pharma Messaging Effectiveness: Cross-Channel Analysis,” today. The report explored the impact of prescription drug advertising across media channels and resources (e.g., online health portals, health and wellness blogs, social media, TV, radio, pharma websites, etc.). Pharma ads served in a healthcare provider’s (HCP) office outperformed all other channels as the most trusted source of health information, regardless of respondents’ age. The study found ads showed in an HCP office earned up to +16% higher level of trust compared to ads on websites and online health portals, which was the second most trusted communication channel.

“We continue to explore the benefits of matching the right audience with the right message across industries,” said Kara Manatt, EVP of Intelligence Solutions, MAGNA. “Consistently, the data shows that advanced strategies, like this cross-channel approach tested for pharma ads, yield better outcomes than traditional demographic targeting alone.”

The study revealed pharma brands can benefit from a strategic messaging approach that aligns to audience channel preferences, e.g., pair ads in the HCP environment with social media ads to reach adult Gen Z (19%), while combining HCP ads with pharma company or brand website ads to connect with Millennials (16%), Gen X (13%), and Boomers (10%).

“We now have confirmation that Americans are most focused on healthcare in the spaces and places where they receive care, and the results of our research firmly cement the doctor’s office as the most influential place for brands to reach healthcare consumers along their treatment journey,” said PatientPoint Chief Client Officer Linda Ruschau. “This research also underscores how targeted marketing in the endemic, highly contextual physician’s office environment can most effectively reach the right patients with the right information at the right time.”

A focus on trustworthiness is one area of opportunity identified for pharma advertisers. The study demonstrated that pharma brands could be more effective with less frequent advertising and by emphasizing clear, transparent messaging designed for education and actionable purposes.

When it came to pharma ads appearing on social media, research participants noted, “I’ve seen these types of ads way too many times in this setting,” and those appearing while browsing online “use complex medical terms that are challenging to understand.”

On the flip side, the top reason for participants to trust ads shown on TV and video channels was “the information they convey is educational.”

Transparency was the main driver of trust on the social media channel, with patients wanting brands to disclose the potential risks and any alternatives to the advertised treatment. These results point to the possibility of enhanced advertising outcomes based on the right mix of messaging and a cross-channel strategy. Tapping into the healthcare provider’s office places prescription medicine ads in the go-to source for trusted health information (55%), as well as the most trustworthy, suitable (84%), and relevant (5861%), and preferred (55%) environment for patients.

Melissa Gordon-Ring, Global President, Health at Initiative, commented: “Data that can empower pharma brands to deliver even better engagement strategies across their diverse audiences is incredibly valuable. Our clients, many of which are reputable, well-established brands, have a wealth of information they can provide, beyond just their product offerings. We are committed to partnering with them and exploring tools, platforms, and channels that help ensure their messages reach consumers and meet their needs.” [TBA]

To read the full Media Trials/PatientPoint report, please visit the MAGNA website and click the link here.

Methodology:

The “Pharma Messaging Effectiveness: Cross-Channel Analysis” study was conducted in the United States with 1,517 participants across a nationally representative sample of people (age, gender, geography). All participants surveyed were over the age of 18 and self-reported visiting a healthcare provider at least one time annually. They were randomly served ads in one of five channels – healthcare provider’s office, on social media, TV/video (streaming or cable/satellite), online search browsing, or pharma company’s online website (desktop or mobile). The channel environment was selected based on their typical exposure to pharma messaging.

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About MAGNA

MAGNA is the leading global media investment and intelligence company, and part of the IPG Mediabrands network. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers. We are a team of experts driven by results, integrity, and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity, and enablement. For more information, please visit our website: https://magnaglobal.com/and follow us on LinkedIn.

About PatientPoint

PatientPoint® is the patient engagement platform for every point of care. Our innovative, tech-enabled solutions create more effective doctor-patient interactions and deliver high value for patients, providers and healthcare sponsors. Across the nation’s largest network of connected digital devices in over 35,000 physician offices, PatientPoint’s solutions impact roughly 750 million patient visits each year, further advancing our mission of making every doctor-patient engagement better®. Learn more at patientpoint.com.

Media Contacts:

Suzette Meade
MAGNA / IPG Mediabrands
[email protected]

Lisa Policare
Tierney on behalf of PatientPoint
[email protected]