Thanks to what ad giant Magna says was a stronger than expected start of the year, it is giving its outlook for U.S. ad spending an upgrade. The firm now expects total ad spending to rise 10.7% versus a year ago. The good news for podcasters is Magna Executive VP Global Market Research Vincent Létang says the increase “will disproportionately benefit digital pure players.” Digital is expected to grow 13.5% versus 4.4% for traditional media. But traditional outlets will benefit too from a “massive political boost” with billions of incremental ad sales. Magna expects the 2024 election campaigns to generate $9 billion in incremental ad revenues for U.S. media owners this year. That’s an increase of 10% versus 2020.
Even without political spending, and other cyclical impacts like the Summer Olympics, Magna sees a growth year for advertising. When those factors are subtracted, the agency still expects total ad spending to climb 8.2%. Magna expects U.S. audio ad spending to climb 0.8% in 2024.
On a global look, Magna predicts ad spending will grow 10% this year to reach $927 billion.
“While the market power of the global digital vendors grows again, a record number of cyclical boosters this year – elections and major sports events – will add one to two percentage points to advertising spending this year,” Létang said. “The acceleration in ad spend also benefits the digital advertising sales of traditional media owners, which account now for a quarter of their total ad revenues.”
Magna estimates that 28% of traditional media company came from digital ad sales in the U.S. last year. That is up from 20% in 2022.
The ad categories that Magna expects to have the best growth this year include automotive, whose post-pandemic pandemic surge has morphed into more dealer incentives and a need to step up marketing Magna expects auto ad spending to climb 16% this year. It also see stronger ad spending levels from restaurants (+11%), beverage companies (+10%) and financial services companies (+9%).
“Automotive production of cars is in full swing, and those cars are starting to pile up in dealerships, spurring brands to spend again on advertising,” Magna Executive VP Luke Stillman said. “Food and beverage companies are also strong as easing inflation gives them more stability in their supply chain and additional flexibility to advertise.”
On the weaker side, Magna says real estate and appliances, both of which are struggling because of high interest rates, will pull back on spending. And it says entertainment will be weak because of overhangs from the Hollywood strikes are affecting the pipeline of new shows and films.
Magna says the U.S. and France – both growing at an +11% pace – are among 2024’s most dynamic ad markets. “The U.S. remains the largest and most intense ad market in the world with advertisers spending $1,100 per consumer in 2024,” its report says. “It’s eight-times more than the global average ($160), ten times more than China ($110) and a hundred times more than India ($10).”
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