Analysts are raising their expectations “slightly” to more than 7% for advertising spend in the US in the full 2024 year.
Madison and Wall has reviewed results from the June quarter for scores of media owners and couldn’t find specific sources of deceleration.
“We are raising our expectations for advertising during this period of time slightly,” the analysts write in a note to clients.
“2024 now looks poised to grow in the US by 7.2% excluding political advertising (or 10.5% including it).
“On these estimates and under our definitions, total advertising in the US will amount to $US397 billion during the year with $16 billion of political and issue advertising as part of it.”
For digital advertising, Madison and Wall expects 9.3% growth in the September quarter and 8.1% in the three months to December. Including political advertising, growth rates should be closer to 12% in both periods.
The television industry is likely to experience ongoing weakness at both the national and local levels, including connected TV.
Following the June quarter’s -1.0% decline, the September quarter of 2024 will experience a temporary boost of 3.7% growth at the national level.
“This should occur primarily because of a shift of budgets in association with Olympic activity,” the analyst said.
Madison and Wall forecass a 3.8% decline during the December quarter leading to a -1.2% drop for the full year.
“To make things worse for many of the industry’s incumbents, because these figures include traditional broadcast and cable networks as well as their owned & operated streaming services and growing services from the likes of Amazon, Netflix, Roku, Samsung and others, it’s safe to say that the typical nationally-oriented TV network owner will experience much weaker results,” the analysts said.
“2025 will look softer only partially because of the Olympics comparable. While we expect a -4.1% decline for the full year, national TV is poised to experience ongoing low to mid-single digit declines on an ongoing basis.”
For publishers – including owners of newspapers, magazines and pure-play digitals -- the June quarter was another period of weakness with a -4.2% decline in ad revenue excluding political advertising.
“Despite marketers’ claims of support for journalism, there is limited evidence of advertising growth among publishers of content,” the analysts said.
“Although we think that publishers who invest enough in their content and who identify appropriate niches have the opportunity to grow, there is little evidence to support the notion that advertising in support of the publishing industry will ever be a growth business again.
“Our forecasts generally anticipate mid-single digit underlying (ex-political) declines on an ongoing basis for these media owners.
“To reiterate an important point, there will be publishers of journalistic content who will grow their businesses – especially those investing heavily in original content - but the bulk of publishers are unlikely to do so.
“That doesn’t necessarily mean doom and gloom for journalistically-oriented entities, but it does emphasise the importance of securing alternative revenue streams, primarily including fees from consumers who are more likely to pay directly for value when they experience it, versus marketers who often have a difficult time doing the same.”
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