Dive Brief: 

• The U.S. advertising industry will grow 5% in 2023 to $360 billion and increase another 4.2% (excluding political advertising) in 2024, according to a report from Madison and Wall. Including political advertising, ad revenue is forecast to grow 8.1% in 2024.
• Digital platforms, which include search, social, commerce, retail media and digital video platforms, will account for about 64% of all advertising in 2023. Digital platform-focused companies are expected to collectively grow 11%, led in large part by retail media, which will account for about $42 billion in advertising revenue in 2023, up 20% over 2022.  
• Traditional television, both national and local, will experience declines over the year, particularly as cord-cutting increases and the Hollywood strikes continue, reducing programming inventory. Outdoor advertising is expected to see modest growth, while audio advertising will remain flat.  

Dive Insight: 

Retail media is once again the story in this most recent outlook report, thanks to the channel’s ability to reach consumers in a buying mindset with valuable first-party retailer data. Madison and Wall analyst Brian Wieser forecasts that the sector will account for 75% of the industry’s overall revenues by 2028. 

Amazon continues to maintain a dominant position in the retail media space, though others — including Walmart, Instacart, Ebay, Uber, Criteo, Booking.com and Expedia — are well-positioned in the category and are expected to sustain double-digit growth for years to come, according to the report.  

On the other hand, so-called “open internet” companies will not grow much, as legacy print publications will continue to see the declines recorded prior to the pandemic. The ad tech sector, however, can grow faster, pending insertion order-based sales continue to move toward programmatic trading.  

Meanwhile, the traditional TV sector, already hammered by cord-cutting and the Hollywood strikes, will continue to be pressured to demonstrate effectiveness beyond reach and frequency, “especially as pure-play digital platforms are increasingly capable of satisfying nearly every marketing goal as well or better than any alternative,” Wieser wrote.  

The one bright spot will be if broadcast networks and channels can capitalize on their existing and sizable relationships with marketers to offer a wider array of media products. In an example, Wieser noted that marketers could create common identifiers that allow for integrated sales of traditional TV, streaming video and other forms of digital inventory.

Many of these concerns, however, may be masked by the upcoming political season, which will add roughly $17 billion in revenue to media owners in 2024, particularly owners of local media broadcast channels. Still, the report notes that internet-related advertising has become increasingly significant, and that as the category grows, its year-over-year skews to growth rates will be “increasingly evident.”