In 2024, research predicts advertising revenue will soar significantly across diverse sectors, driven by digital platforms and surpassing expectations, marking a pivotal year in industry growth.
According to several US forecasts, 2024 promises to be a banner year for advertising. Last December, IPG Mediabrands predicted that ad spend would grow 8.4% this year, but last week, its research arm, Magna, raised its forecast, saying revenues would grow 9.2% to reach $390 billion.
Some, but not all, of that increase will be due to spending on political ads. Retailers and travel brands will contribute to the boon by increasing ad spend by 9%; automotive will spend 6% more over 2023.
Social media advertising will grow by 14 percent to reach $80 billion, growing 14% from 2023. That’s more than advertisers spend on linear TV. Advertising in long-form streaming will grow 13% to reach $10 billion, thanks in large part to ads in Amazon Prime.
Magna isn’t alone in predicting better revenues. Last week, Madison and Walls’ Brian Wieser predicted an increase in ad revenues. Moreover, not all that growth will result from political ads, although that will increase to $15 billion this election season.
“My expectations for the advertising industry for 1Q24 now call for expansion of 8.0% excluding political advertising, and for the full year 2024 I expect 5.6% ex-political growth. In my prior forecast, I expected 1Q24 growth of 7.0% and full-year expansion of 5.2% on a comparable basis,” he wrote in a blog post.
The Non-Recession’s Impact on Publishing
Interestingly, both Magna and Wieser cite improving economic conditions as the source of growth, including a rise in GDP, slowing inflation, and better-than-expected job growth.
For the past two years, publishers have laid off staff in anticipation of lower advertising revenue (in 2023 alone, publishers shed 19,000 jobs). Those cuts were deemed necessary due to the impending recession, which never materialized.
This time last year, we wrote about the layoffs at publishing houses due to an impending recession, even though ad spending was rising.
Media as Revenue Generator
Economic historians have long advised that down markets are a great time to advertise, and brands that spend while others cut back stand to gain big market share.
However, according to Marc S. Pritchard, Chief Brand Officer at Procter & Gamble, advertising is a way to add value to a brand, regardless of economic conditions. Writing on LinkedIn, he explains:
“There’s a way of growing markets that doesn’t get the attention it deserves: MEDIA. Media grows markets, yet it is perhaps one of the most underrated and underused ways of accelerating market growth. It’s generally the largest spending element in the marketing mix and can have a significant impact on market growth—positive or negative—but is often considered an expense to be cut when there are profit problems. However, when done well, media investment is a revenue generator that can make markets bigger.”
Publishers have always portrayed their inventory as a source of brand growth, and it’s gratifying to hear the fourth largest company in the world agree. The trick, as Pritcher notes, lies in doing it well. To that end, AdOps teams are deploying multiple AI tools and platforms to identify and respond to trends to drive campaign performance, as we detail in the upcoming Publisher Pulse. With strong economic growth and better insights into campaign performance, perhaps advertisers will continue to increase spending in 2025 and beyond.