Magna’s 2023 forecast for the total U.S. audio market calls for advertising trends in the first half of the coming year to continue those of 2022’s sluggish second half. That is likely to be followed by a slight acceleration in second quarter 2023 before picking up at a faster rate in the second half. This prognosis isn’t unique to audio but is anticipated to play out across the entire U.S. ad market.
Magna expects national radio advertising to remain weak in the first half of 2023 and for local to hold up better. Auto also looks more promising. “We do think at some point in 2023, auto will turn a corner and will start increasing advertising spend,” says Michael Leszega, Associate Director of U.S. Market Intelligence at Magna. “We see car sales that have started to increase now” – albeit only when compared to low car sales in 2021. “We think that auto will rebound somewhat to give a bright spot for the radio market.”
On the flip side, financial services, another big radio category that was strong in 2020-2021, is anticipated to remain challenged in 2023. “This was a growth vertical for years and it's something we expect to take a step back in 2023,” Leszega predicts.
Magna also sees sports betting, which pulled back on local advertising, not picking back up just yet.
Pulling back to assess the total U.S. ad market, Leszega says advertisers are “really concerned about the macro-economic outlook heading into 2023 across all the different channels.” Leszega sees advertisers tightening their belts in the year ahead to weather the uncertainty. “It seems like more than any kind of actual economic deterioration, what we've seen is really like a deterioration in certainty.” Believing the current macroeconomic picture is nothing like the Great Recession of 2008, he is perplexed by “the level of uncertainty that we see for an economic outlook which isn't terrible.”
Audio is expected to stabilize in 2023, with growth of 0.5% anticipated, after an earlier forecast for 0.8% growth. The growth is likely to come from podcasting and streaming audio with broadcast radio in the U.S. on track to decline four percent year-over-year in 2023.
“We continue to see a lot of growth in podcasting,” says Leszega. I think what's causing advertisers to lean into digital audio, specifically podcasts, is you have Millennials that have specific interests and who are not targetable on other platforms – but you can target them on podcasts. So I think advertisers are really leaning into these early adopters, who are younger, who are more affluent, who are educated, and are what advertisers are really looking for.”
Looking back on 2022, Magna confirms what publicly traded radio companies said on their quarterly earnings calls – the current year got off to a roaring start with what Magna estimates to be 14% year-over-year growth in the first quarter. Keep in mind that the comparison is to a weak Q1 2021, when people were just starting to get vaccinated. Broadcast radio revenues barely grew in Q2 2022 and declined in Q3, Magna said.
On a global scale, Magna says audio ad spending climbed four percent year-to-year in 2022 to an estimated $29.9 billion. That is still a bit shy of the $31.8 billion in total audio ad spending that occurred prior to the pandemic. Magna forecasts worldwide audio ad spending to climb one percent next year thanks to what it says is the “continuing rise” of digital audio ad formats like podcast and streaming, to offset any slowdown in broadcast radio spending.
“The growth in digital audio ad sales comes from digital pure players as well as radio broadcasters developing their on-demand and streaming offering and attracting more and more brands, thanks to improved targeting opportunities,” Magna’s update says.
コメント