A prominent expert in the advertising field has scaled back their predictions for ad expenditures in the United States, due to an uncertain economic forecast and a dip in consumer trust levels.
The research division of Magna, which is under IPG Mediabrands (a part of Interpublic Group, a large advertising company), has predicted that U.S. ad sales could reach $397 billion in this current year, representing a 4.3% growth compared to the previous year, considering factors like last year’s election period. However, earlier in December, Mediabrands had anticipated a 4.9% growth for the entire year.
2024 saw an unprecedented increase in advertising expenditure due to a robust and consistent economy paired with continual advancements in media and advertising technology. This trend is set to continue into 2025, with the majority of economic indicators remaining strong. However, it’s important to note that confidence significantly impacts marketing and ad spending decisions. A recent decrease in confidence has already influenced the market dynamics, leading the U.S. to adjust its growth projections for 2025, according to Vincent Létang, executive vice president of global market intelligence at MAGNA and co-author of the report.
Although overall ad spend is still predicted to expand in the low double digits, digital media ad sales are expected to keep growing at a higher rate. Conversely, many traditional media platforms could struggle with stagnant advertising revenues this year. (Vincent Létang’s statement)
The Trump government’s intention to impose tariffs on numerous nations has led to a decrease in the stock market and a less optimistic view among Wall Street analysts regarding economic expansion.
After factoring in cyclical expenditures for both years, considering unusual factors like political campaigning and the Summer Olympics in 2024, the projected non-cyclical ad revenue growth for 2025 has been revised down to 6.7%, as opposed to the earlier prediction of 7.3%.
The report emerges mere weeks before the media sector’s yearly “upfront” sales period, during which U.S. television networks aim to sell a significant portion of their advertising space tied to their upcoming programming cycle. If advertisers are apprehensive about consumer trust and readiness to make purchases, this could potentially influence their eagerness to allocate funds for media, several months prior to when their ads would be due to air.
According to Magna’s forecast, digital media outlets specializing in search, social media, digital video, and digital audio are expected to see a significant boost in ad revenue by approximately 9.6%, reaching a total of $293 billion. On the other hand, traditional media owners including TV, streaming, print, outdoor advertising, and cinema could experience a slight decrease of 1% in their ad sales, amounting to around $103 billion. Magna predicts that national TV sales across all platforms will remain unchanged at roughly $46 billion. However, they anticipate a 14% increase in ad-supported streaming revenue to help compensate for the projected 7% decline in linear viewing-related ad sales.
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2025-03-26 16:16