Dive Brief:

• Ad sales reached an all-time high in 2018 at $212 billion, with ad spending growing by nearly 10%. Q4 saw the strongest growth in 18 years at 12%, driven mainly by digital, audio and out-of-home (OOH), according to a Magna report shared with Marketing Dive. The IPG Mediabrands division predicts a 10th straight year of ad growth in 2019, with digital ad sales up 12% and linear ad sales down 5%, for a total of $217 billion.
• The report also shows that OOH is outperforming every other linear channel, partly due to the increased investment from the tech sector. It grew 4.5% in 2018 to $8 billion and is the only linear media format to see consistent organic growth, per Magna.
• Along with OOH, paid search is also driving much of the ad market's growth, with sales jumping 23% to reach $54 billion in 2018. Magna's report also revealed that Amazon more than doubled its ad revenue last year to around $6 billion. The e-commerce giant also boosted its own ad spending by 50% in 2018 to become one of the largest advertisers, ranking sixth behind Procter & Gamble, AT&T, Geico, Comcast and General Motors.

Dive Insight:

Magna's spring update reveals a strong ad sales market and reinforces that growth continues for digital platforms, as digital accounts for more than 50% of ad spend and 30% for national consumer brands. However, the report suggests that overall growth for the ad market will slow this year to 1.9%. Social, video and search are predicted to be the fastest-growing digital formats for 2019.

Search continues to be a strong segment and has helped boost the overall ad market in recent years. However, other reports have noted a slowdown in search's growth. About half of marketers planned to keep their search budgets the same in 2019, according to a recent Forrester forecast. Search was projected to grow at a 7% CAGR, its slowest to date, reaching $60 billion by 2023. The growth slowdown comes as ad budgets are predicted to shift to voice and Amazon continues to snap up a larger share of the search business, with marketers moving up to 60% of their search budgets — historically allocated for Google — to Amazon.

Magna's forecast also highlights the continued outperformance of OOH, which it expects to grow by 2.8% this year with new digital screens. The OOH forecast aligns with other reports that emphasize the format being the fastest-growing traditional format. OOH advertising is expected to grow significantly through 2021 due to the rise in digital screens and programmatic sales. Digital OOH represented about one-third of the total OOH space, according to the Out of Home Advertising Association of America (OAAA).

Magna also predicts changes to the broader media landscape in 2019, with over-the-top TV and on-demand video growing more competitive, which could lead major streaming players like Amazon and Netflix to embrace hybrid, ad-supported models. In its fall 2018 update, Magna predicted OTT ad spend to jump 40% in 2018 to $2 billion.