top of page

Report Suggests Ad Market Has Finally Begun To Stabilize.

An analysis of global forecasts from Axios predicts a more stabilized ad market over the next five years, with expected growth in North America at 4.2% for 2024, down from 5.6% in 2023.

“Heading into 2024, analysts predict mid-single-digit ad growth for the foreseeable future, thanks in large part to the maturity of the digital ad market,” Axios' report says, while noting GroupM's prediction that digital advertising will represent close to 70% of total global ad revenue in 2024.

The year-over-year decline also applies to ad spend on traditional media – including radio, TV, and print – although digital advertising options are not expected to compensate for those losses.

It's important to note that the North America forecast for 2024 excludes political ads, which are expected to artificially inflate U.S. forecasts during alternating-year election cycles for the next several years. Were political ads included, the North American ad market would be up 7.8% this year. The report also points out that other cyclical events such as the Olympics will also artificially increase ad growth in 2024.

Axios' report also cites a forecast from Magna Global predicting that politics and sports aside, ad growth in 2024 will be driven by automotive, travel, pharmaceutical and consumer package goods categories. CPG companies, which account for 20% of all global ad spend, are expected to benefit from lower inflation and sports events. Slower growth is expected for entertainment marketing, in the wake of last year's actors and writers strikes, while globally, sports betting advertising should see weakened growth due to increased regulatory pressure on betting in Europe.

While mostly in the rear-view mirror, COVID is still linked to the slower growth forecast for the next several years. As a result, the report says, “Sales and marketing budgets for digital-first companies have slowed due to higher interest rates. More advertisers, particularly auto manufacturers, retailers and entertainment companies, are leaning into direct-to-consumer marketing through their own apps, minimizing some external ad spend.”

Taking a further look back, Axios connects the forecasted trends to the symbiotic relationship between the ad industry and gross domestic product. “In a world where traditional advertising was dominated mostly by auto manufacturers, consumer package goods companies and mass market retailers, the growth of the advertising industry was largely correlated to economic output,” it says, “but the rise of new ad formats online and new digital businesses pushed the ad market to grow faster than GDP during the late 2010s, driving temporary but unsustainable double-digit growth for digital advertising. The pandemic not only wiped out that momentum in 2020, but it caused a ripple effect of broader uncertainty for the ad market in the three years that followed.”

16 views0 comments


bottom of page