US Ad Revenues to Approach $400 Billion This Year

Dan Meier 05 June, 2024 

The ad industry is heading into the second half of the year with bright expectations, with US ad revenues projected to approach $400 billion in 2024, according to the latest forecast from Brian Wieser, principal of consultancy Madison and Wall. The projection represents 6.3 percent YoY growth, excluding political advertising, revised upwards from Wieser’s previous forecast of 5.6 percent.

The forecast follows a stronger-than-expected Q1, which saw the US market grow by 10.1 percent, outperforming Wieser’s prior prediction of 8 percent growth. As a result of this strong performance, the economist expects 6.7 percent revenue growth in Q2.

Wieser notes that Q1 benefited from easy comparison with Q1 2023, when the market was up just 1.2 percent. Looking ahead to Q3, ad revenues are expected to grow at a slower pace (5 percent), against tougher comparisons with Q3 2023 (7.9 percent). And revenue growth is expected to slow further in Q4 (4 percent).

The moderate Q3 forecast also suggests a relatively limited impact of the Summer Olympics on US ad revenues. “Over the past 10-15 years, I have observed that the Olympics don’t represent a meaningful amount of incremental spending for the advertising industry overall; instead they drive a shift of spending from existing budgets,” says Wieser.

The full-year forecast of 6.3 percent growth would see US media companies generate $379 billion in total ad revenues this year, excluding political advertising. The projection extends to 2028, forecasting 4-5 percent growth each year in nominal terms.

As for political advertising, Wieser suggests spending was down fairly significantly from Q1 2020, the same stage of the previous presidential election cycle. But he expects political spend this year ($15.1 billion) to top 2022 ($12.6 billion) and 2020 ($14.1 billion). Added to the year’s non-political spending, this would bring total US ad revenues to $394 billion in 2024.

Competing channels

In terms of individual media, Wieser expects recently observed budget shifts to broadly continue, with digital stealing further share from outdoor, audio, TV and print-based publishers. Q1 saw pure-play digital (as opposed to digital advertising associated with other media) capture 66.1 percent of all revenues, up from 62.4 percent in Q1 2023. Digital revenues grew by 17.1 percent in Q1, but are anticipated to decelerate in Q2 (12.5 percent) and for the full year (11.4 percent). 

Within digital formats, retail media saw high growth in Q1 (22.2 percent) and is trending towards 18 percent in Q2. Wieser projects steeper deceleration for social media, which grew 20.5 percent in Q1; and search, which climbed 15.6 percent in Q1, closing to 10 percent in Q2.

Continuing the trends in shifting ad budgets, national TV advertising was down by 2.8 percent during Q1, despite easy comparisons with the previous year. TV’s trajectory suggests ongoing decline for the rest of the year, with revenues down 5.5 percent in Q2. And while the Olympics should provide the medium a boost in Q3, Wieser forecasts a full-year fall in TV revenues roughly in line with Q1.

“At both the national and local levels, television’s weakness continues to be a function of traditional TV advertisers continually shifting their budgets away from TV and towards digital platforms while newer marketers allocate relatively smaller shares to the medium, creating conditions of permanent secular decline for the medium so long as it narrowly defines itself around professional video rather than pursue opportunities that would allow its media owners to more fully complete as advertising platforms,” says Wieser.

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