NEW YORK, NY — MARCH 26, 2025 —

“Uncertain Times”

Key Findings:

• As the final estimates for 2024 are in, MAGNA reports that U.S. advertising sales reached $380 billion, reflecting a +12.4% increase (+9.9% excluding cyclical spending). As expected, this marks the best performance in twenty-five years, second only to the post-COVID rebound of 2021.
• MAGNA always anticipated a market slowdown in 2025 due to the strong comparables, but we have further reduced our growth forecast in this update. The lack of economic visibility and a decline in confidence may impact marketing and advertising budgets in the short term.
• In this uncertain economic environment, the most vulnerable industry sectors include consumer goods (packaged food, beverages, and personal care), quick-service restaurants (QSR), and automotive.
• Despite the challenges posed by economic uncertainty, organic growth factors—such as media innovation, AI, retail media, and ad-supported streaming—will continue to enhance the effectiveness and efficiency of advertising formats, encouraging advertisers to maintain or expand their budgets.
• Factoring all drivers and inhibitors, media owners’ advertising revenues are projected to grow by +4.3% in 2025 (down from the previous forecast of +4.9%). When adjusting for cyclical spending in both years (political advertising and the Summer Olympics in 2024), non-cyclical ad revenue growth in 2025 is revised from +7.3% to +6.7%, still solid by historical standards.
• Digital Pure Players (DPP) in Search, Retail Media, Social Media, Digital Video, and Digital Audio (such as Google, Meta, Amazon, and Spotify) will see their advertising revenues grow by +9.6%, reaching $293 billion. In contrast, the ad sales of Traditional Media Owners (including Television, Premium Long-Form Streaming, Audio Media, Publishing, OOH, and Cinema) may face challenges in this uncertain environment, resulting in a slight decline of -1%, at $103 billion.
• Cross-platform national television sales (linear + streaming) are expected to remain stable around $46 billion, as continued growth in ad-supported streaming (+14%), helps offset a decline in linear viewing and ad sales (-7%).

Vincent Létang, EVP, Global Market Intelligence at MAGNA and co-author of the report, commented: “The combination of a strong, stable economy and ongoing media/advertising innovation drove record ad spend growth in 2024. Innovation will continue into 2025, and most economic fundamentals remain healthy. However, confidence plays a crucial role in marketing and advertising investment decisions. The current – hopefully temporary – dip in confidence has already dampened the dynamics of the ad market, prompting us to revise our growth forecast for 2025. While total ad spend is still expected to grow in the mid-single digits, digital media ad sales will continue to experience high-single-digit growth. In contrast, most traditional media channels may face stagnating ad revenues this year.”

2024: Ad Market Stayed Strong in Fourth Quarter,
Confirming Record Full-Year Growth
When analyzing the fourth-quarter earnings of U.S. media companies, MAGNA found that advertising sales were once again strong across the board. Advertising sales rose by +13.0% year-over-year in the quarter, or +8.6% when excluding the impact of political advertising. This was in line with MAGNA expectations, and almost as strong as previous quarters, capping a very strong year for the U.S. ad market. Full-year advertising spending was up +12.4% to $380bn, or +9.9% excluding cyclical spending, for the full year. This was the strongest performance in twenty-five years if we exclude the post-COVID rebound of 2021.

The U.S. ad market was driven by three main channels: Search & Commerce Media, Social Media, and Ad-Supported Streaming. Search/Commerce ad sales gained +16% to $152bn while social media sales increased by +18% to $84bn. The two channels benefitted from the addition of a suite of AI advertiser products that made setting up and running campaigns easier than ever. The result was an increase in demand from brands, especially small businesses, as better targetability and conversion rates led to higher revenue per impression. Finally, ad-supported streaming sales gained nearly +19% to $11bn, offsetting linear declines (-5%) and nearly stabilizing the cross platform national television market (-1%).

2025: Uncertain Times
Business and consumer confidence deteriorated since January due to a combination of factors. First the stock market recorded a significant decrease: the Dow index lost -6% and the Nasdaq lost -11% in the last few weeks, and as often. The psychological impact on consumers may have been exacerbated by some increases in food prices. Eggs reached an all-time high of $6 per carton in February, almost doubling from a year ago. In fact, the current egg shortage and resulting inflation have nothing to do with new policies or the general economic environment but are caused by bird flu outbreaks and the inelasticity of demand for eggs. But despite the fact that overall food costs overall did not accelerate in Q1 – staying around 3% – U.S. consumers were shaken by the sharp inflation in a product so ubiquitous and symbolic of the American lifestyle. This unfortunate combination caused a sharp drop in the consumer confidence index, which plummeted from 74 in December to 58 in March, close to the all-time low recorded in June 2022 when gas hit $5 a gallon in the wake of the Ukraine invasion.

So, what does it mean for the U.S. economic outlook and the U.S. ad market? We need to keep in mind that core economic fundamentals—such as CPI inflation, job market, retail sales, and corporate profits—remain healthy. Additionally, international trade tensions don’t necessarily lead to extensive economic damage. Nevertheless, the current confidence crisis has already impacted economic activity in Q1, and MAGNA expects negative GDP growth for the first quarter. The uncertainty will also lead to cautiousness in investment and marketing spending decisions for the months ahead.

2025: Lack of Visibility Will Slow Down Ad Market in 2025
MAGNA anticipates that the lack of visibility and risk of a trade war may cause marketing and advertising budgets to face freezes or cuts in industries that are most vulnerable to global trade, supply chain disruptions, and consumer confidence issues. That includes consumer packaged goods companies, in food, drinks, and personal care, as well as quick-service restaurants and the automotive industry. All these industries are exposed to international supply chains and global prices (commodities, car parts) on one hand, and exposed to consumer scrutiny: following the 2022-23 crisis, consumers learned to mitigate inflation by delaying purchases (cars) or trading down (CPG products, retail chains). One example of the challenges faced by CPG companies: the Coca Cola CEO hinted that the 25% tariff on aluminum may drive global prices (already 21% above 2024 in Feb. 2025) which may force Coke to shift from cans to plastic bottles to mitigate the increase in production costs ; once again, CPG companies may face the dilemma of raising consumer prices or seeing reduced margins, which may affect their marketing budgets.

These industries account for a sizeable share of ad spend in the U.S., but there are still large, growing industry verticals that are not particularly sensitive to global costs or economic fluctuations: Pharmaceuticals, Retail, Tech/Telecoms, Entertainment, Finance, and Insurance to name a few. Moreover, endemic, and organic growth factors (media innovation, retail media, ad-supported streaming) that drove ad spend faster the general economic growth in recent years, will continue to make advertising formats more effective, efficient, and attractive to brands, and encourage advertisers to maintain or develop advertising budgets. After factoring all economic and business factors, MAGNA reduces its 2025 ad market growth forecast from +4.9% in December 2024 to +4.3%. Non-cyclical ad sales will still grow by +6.7% (previous forecast +7.3%).

The advertising revenues of Digital Pure Players (DPP) in Search, Retail Media, Social Media, Digital Video and Digital Audio (e.g. Google, Meta, Amazon, and Spotify) will grow by nearly +10% to reach $293bn. Search/Retail ad formats will grow by +10% to $167bn (traditional search engines +8%, Retail Search +14%), while social media formats will rise by +11% to $92bn.

Meanwhile Traditional Media Owners (TMO’s: Television, Premium Long-Form Streaming, Audio Media, Publishing, OOH, and Cinema) are typically more vulnerable when a lack of business visibility leads some marketers to prioritize short-term KPIs and lower-funnel channels. MAGNA thus anticipates TMO’s non-cyclical ad sales to erode by -1% to $103bn. Cross-platform national television sales will be stable (-1% to $46bn) thanks to demand for streaming and interest in live sports events. Streaming sales will remain strong and gain +14% to reach $12.4bn, or 27% of total cross-platform national TV sales. Ad-Supported Streaming (which includes FAST channels and all premium long-form streaming platforms, Hulu, Peacock, Netflix, Prime etc.) benefit from growing reach and viewership as 75% of all streaming hours are now ad supported, up from 58% a year ago. Sports will continue to provide a tailwind for television viewing and ad sales this year, as additional content will attract viewers and advertisers on linear networks (additional college football playoff games and college basketball games) as well as in Streaming (NACAR and WNBA on Prime Video, exclusive NBA games on Peacock, and a flurry of Sports docuseries on Netflix).

Out of home advertising sales are predicted to grow by +4.8% this year, to reach the $10bn milestone driven by double-digit growth in digital OOH revenues (+12% to $3.5bn, or 35% of total OOH sales). Within out of home, urban (or city) focused segments like transit (+10%) and street furniture (+8%) will outperform the more rural segments like billboards (+3%). Throughout 2024 local brands performed better than their national counterparts. We expect this trend to continue into 2025. As for national advertising, the connection of DOOH networks with specialist and omnichannel programmatic platforms will continue to bring incremental ad sales, coming from programmatic and digital media budgets. Other traditional media channels may struggle in 2025. MAGNA forecasts a decrease of -2% for Audio Media (broadcast radio, streaming audio, and podcasting) and Publishing (print and digital) as revenues from digital ad formats will not quite offset declines on legacy formats. For the full year Audio Media will account for $16bn, while Publishing will account for $15bn. Podcasts, which saw sales grow by double and triple digits a few years ago, will see growth in the mid to high single digits in 2025 (+9% to $2.7bn). Meanwhile non-political local TV sales will drop by -3.7% to $16.5bn; including (the lack of) political ad sales in 2025 local TV ad revenues may shrink by -27% this year after growing by +26% in 2024. Finally, Direct Mail advertising sales will erode by -3.5% to $16.8bn.

KEY FIGURES

About MAGNA
MAGNA is a leading global media intelligence company and part of the IPG Mediabrands network. Our trusted insights, proprietary trials offerings, 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 support clients, media partners, and cross-functional teams through partnership, education, connectivity, and enablement. For more information, please visit our website: https://magnaglobal.com/and follow U.S. on LinkedIn.

Press Contact:
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IPG Mediabrands
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