Magna forecasts strong US ad growth driven by digital, AI, and political ads. Non-cyclical ad sales are projected to hit $264B in 2024, led by digital channels.
Forecasters entered 2024 with a sunny outlook on ad spending, which has received a boost from an election cycle and events like the Olympics. Many media watchers have revised their projections upward over the year, including Magna, which adjusted its expectations in June and March.
The trend speaks to a stronger appetite for brand building versus 2023. Deep-pocketed marketers like Nike used the Olympics to launch major ad campaigns and a steady influx of political dollars. Vice President Kamala Harris has ramped up advertising since entering the race earlier this summer, focusing heavily on digital.
Removing elections and the Olympics from the equation, growth in other categories still paints a more robust picture than many expected.
“Even without the incremental advertising spending generated around cyclical events, 2024 already looks like a strong year for the US ad market, growing by almost +9%,” said Vincent Létang, Magna’s executive vice president of global market intelligence, in a statement. “This is due to strong demand from brands, in a stable economy, and supply-side innovations — e.g., the rise of ad-funded streaming and retail media – offering more scale and return on investment to marketers.”
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Pure-play digital channels, including search, retail, social, and short-form video, will reap the biggest rewards from the industry rebound. Non-cyclical advertising sales in this area are expected to grow by 13.6% to $264 billion, accounting for 72% of the total market. Magna credited new artificial intelligence tools from major platforms like Google and Meta for driving incremental spending from brands in the pure-play category.
Ad revenues for traditional media owners will grow by 5.1% to $11 billion, largely thanks to the influx of cyclical spending. Without cyclical spending, traditional media ad revenues would decline by 1.5%. Excluding cyclical factors, traditional ad sales reached $25 billion in Q2, down 1.3% year over year.
Ad-supported streaming is the fastest-growing channel in 2024, according to Magna, with sales up by nearly 20% in the first half. Streaming has seen an influx of ad-supported options, with Amazon Prime Video introducing commercials in January and other platforms like Netflix securing larger upfront commitments as they improve their ad tech and sales sophistication.
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Magna foresees that the momentum will hold through the rest of the year, with non-cyclical growth increasing by 7.4% in the second half, up from a previously forecast 6.4%. Looking forward to 2025, the advertising market will remain strong, with non-cyclical ad spending growing 6.3% to $391 billion.
Total ad sales will rise just 3.9% above 2024 since odd-numbered years tend to lack blockbuster events like the Olympics. Digital pure-play platforms will grow 9.3% to $289 billion, while traditional owners will decline by 1.5% to $102 billion. Search and commerce and social media will gain 10%, accounting for two-thirds of all advertising in the U.S.
