Dive Brief:

• Media agency Magna again raised its U.S. ad spending forecast for the year, anticipating revenue growth of 11.4% to $377 billion, according to news shared with Marketing Dive. A prior forecast from June called for revenues to increase by 10.7%.
• Improving macroeconomic conditions, strong appetites in digital and streaming and cyclical events, including the elections and Summer Olympics, led to the revision. Cyclical events accounted for $10 billion in increased spending in the revised forecast.
• Magna also expects that non-cyclical ad spending will grow by 8.9%, up from 8.2% in previous forecasts and marking one of the best performances for the category in 20 years. Non-cyclical U.S. advertising revenue grew by approximately 11% in the first half, in line with expectations.

Dive Insight:

Forecasters entered 2024 with a sunny outlook on ad spending, which has received a boost from an election cycle and events like the Olympics. Many media watchers have revised their projections further upward over the course of the year, including Magna, which previously adjusted its expectations in June and March.

The trend speaks to a stronger appetite for brand building versus 2023 — deep-pocketed marketers like Nike used the Olympics to launch major ad campaigns — as well as a steady influx of political dollars. Vice President Kamala Harris has ramped up advertising since entering the race earlier this summer, with a heavy focus on digital. 

Removing elections and the Olympics from the equation, growth in other categories still paints a more robust picture than many were expecting.

“Even without the incremental advertising spending generated around cyclical events, 2024 already looks like a strong year for the US ad market, growing by almost +9%,” said Vincent Létang, Magna’s executive vice president of global market intelligence, in a statement. “This is due to strong demand from brands, in a stable economy, and supply-side innovations — e.g., the rise of ad-funded streaming and retail media – offering more scale and return-on-investment to marketers.”

Pure-play digital channels, including search, retail, social and short-form video, will reap the biggest rewards from the industry rebound. Non-cyclical advertising sales in this area are expected to grow by 13.6% to $264 billion, accounting for 72% of the total market. New artificial intelligence tools from major platforms like Google and Meta were credited by Magna for driving incremental spending from brands in the pure-play category.

Ad revenues for traditional media owners will grow by 5.1% to $11 billion, largely thanks to the influx of the cyclical spending. Without the cyclical spending, traditional media ad revenues would decline 1.5%. Excluding cyclical factors, traditional ad sales reached $25 billion in Q2, down 1.3% year over year.

Ad-supported streaming is the fastest-growing channel so far in 2024, according to Magna, with sales up by nearly 20% in the first half. Streaming has seen an influx of ad-supported options, with Amazon Prime Video introducing commercials in January and other platforms like Netflix securing larger upfronts commitments as they improve their ad tech and sales sophistication.  

Magna foresees that the momentum will hold through the rest of the year, with non-cyclical growth increasing 7.4% in the second half, up from a previously forecast 6.4%. Looking forward to 2025, the advertising market will remain strong, with non-cyclical ad spending growing 6.3% to $391 billion.

That said, total ad sales will rise just 3.9% above 2024, since odd-numbered years tend to lack blockbuster events like the Olympics. Digital pure-play platforms will grow 9.3% to $289 billion while traditional owners will decline by 1.5% to $102 billion. Search and commerce and social media will gain 10%, accounting for two-thirds of all advertising in the U.S.