MAGNA has reduced its 2022 advertising spending growth expectation for the US by one percentage point due to economic and geopolitical uncertainty.
However, media owners’ ad revenues should still grow by 11% this year to pass the $US300 billion milestone.
Technology, Telecoms, Entertainment, Travel and Betting are among the industries expected to grow advertising spending the most, while Automotive continues to struggle with supply issues.
Most media types will grow advertising revenues again: Search (+17%), Social (+16%), OOH (+11%) and Cross-Platform Video (+8%).
Final 2021 estimates: US advertising revenues grew by a record 25% to reach $287 billion. As expected, the pace of growth continued to slow in the fourth quarter:
Vincent Létang, EVP, Global Market Intelligence at MAGNA and author of the report: “The Ukraine crisis has already hit consumer and business confidence. It will slow down economic growth in 2022 and fuel the inflationary trend.
"It is too early to assess the depth and length of economic repercussions, but MAGNA believes the U.S. economy is strong enough to weather this new challenge.
"Looking at marketing and advertising, the macro-economic headwind will be mitigated by continued organic drivers (innovation, emerging verticals, ecommerce) and stronger-than-expected political fundraising (leading to at least six billion dollars in incremental ad spend)."
The major cyclical driver in 2022 will be the November elections. With $5.7 billion already raised by February, according to the Federal Election Commission (+72% vs 2018 at the same stage), MAGNA now expects incremental advertising revenues generated by political campaigns to reach $6.2 billion for media owners for the entire cycle.
This would represent an increase of +41% vs the previous mid-term cycle in 2018 (our previous forecast was +31%). Local television may get $4.2bn (+26% vs 2018), Direct Mail $600 million, and Digital Media formats close to $1.5 billion.
Forecasts:
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