With regards to conventional TV promoting, there isn’t any linear path to restoration.
In its newest U.S. advert forecast for the autumn, Magna discovered largely excellent news for the advert gross sales market. After two quarters of stagnation, U.S. advert spending accelerated to a 4.4% year-over-year achieve within the second quarter, and the general market was up 2.9% within the first half of the yr.
“Six months in the past, the media business was bracing for recession, however advertisers saved calm and continued to help their manufacturers and gross sales by media funding,” Vincent Létang, evp, international market intelligence and creator of the report, mentioned in an announcement. “Because the U.S. economic system and promoting spending have been each stronger than anticipated up to now this yr, and digital media is lastly recovering from its 2022 woes, Magna raises its full-year advert income progress forecast to five.2% for 2023 to succeed in $337 billion.”
In accordance with the report, digital media codecs (search, commerce, social, pureplay short-form video) led the way in which in progress within the second quarter, up 8.7% year-over-year. Nevertheless, the excellent news for advert gross sales doesn’t lengthen to conventional codecs comparable to linear TV.
Magna discovered that conventional media (TV, radio, publishing, out-of-home, cinema) fell 4.1% within the second quarter after a 6% drop in Q1.
And although the digital uptick within the first half of the yr extends to non-linear TV advert gross sales comparable to AVOD, CTV and FAST (up 7%), podcasting (up 14%) and DOOH (up 9%), these positive aspects solely mitigate the long-term decline of conventional codecs in viewers and advert gross sales. They don’t offset it.
Total, Magna raised the 2023 income forecast for digital media homeowners, together with Google, Meta, and Amazon, from 7.9% to 9.6%. The report notes that digital pure gamers will seize a document 69% of whole advert spend in 2023.
In the meantime, conventional media was downgraded from a 3.2% loss to three.6%.
2024 and past
Heading into 2024, it’ll be extra of the identical, with digital on the rise and conventional persevering with to stagnate. The report additionally famous that the writers strike may have a significant impact within the first half of the yr, with an absence of latest content material additional accelerating the shift to digital.
Linear TV can be dealing with challenges of declining worth and quantity. Not too long ago, consumers instructed Adweek that the 2023-2024 TV upfront noticed CPM (price per thousand viewers reached) rollbacks throughout the board, with solely sports activities seeing progress.
