Magna December 2024 forecast: In 2024 ad revenues reached $933 billion, growing by +10.3%. Growth of 6.1% is expected in 2025.
After a strong first half (+12%), the global ad market slowed slightly in the second half (+8%). Expected to slow further in 2025, including digital.
Digital Pure Players (DPP) ad sales grew by double-digits through the year despite tougher comps in the second half.
+11% (Google), +22% (Meta), and +21% (Amazon), increasing their market share to 51% globally and 61% outside China.
“The strong growth of advertising spending in 2024, despite a challenging economic environment, was of course driven by an unusually high number of major cyclical events but, more fundamentally, media innovation is what attracts a growing share of marketing budgets into advertising formats. Digital Pure-Play ad formats (Search, Retail Search, Social and Short-Form Video) are fueled by the rise of Commerce Media redirecting billions of dollars from trade marketing into digital formats. The growing reach of ad-supported CTV streaming makes cross-platform long-form video more attractive to advertisers as it now offers scale on top of addressability and brand safety. With no major cyclical drivers in 2025, MAGNA expects ad spend growth rates to slow, but the organic factors will remain at work, stabilizing TMO ad revenues, and growing DPP ad sales.”
Analyst Brian Wieser from Madison and Wall lowered his US advertising revenue growth forecast for 2025 to 3.6%, down from a previous estimate of 4.5%.
Wieser attributes this revision to declining productivity caused by disruptions in international trade, rising inflation, and broader economic uncertainty driven by new tariffs.
Tariffs, especially on imports from Canada, Mexico, and potentially Europe, are stating to impact ad budgets, particularly in the automotive and pharmaceutical industries.
Automakers alone represent between 7% and 13% of global revenue for major ad companies.
Pharmaceutical industry faces potential risks from tariffs targeting imports from Germany, Ireland, and Switzerland.
Assessment:@Aron slight revision down due to the uncertainty but still positive for 2025.
Since the economy still expected to grow between 1-2% (but lower than previous expectations), I think is accurate to not expect a full on decline in advertising but still a slowdown on its growth rate
Likefolio says there has been a pullback in advertising web-traffic this year
Landon Swan, co-founder of Likefolio said we are seeing a pretty big pullback as far as interest in advertising platforms, about 18% drop in advertising web-traffic (min 0:45). He notes that this is probably priced in already.
Founded in 2013, Likefolio says it uses social media sentiment to understand consumer shifts.
I didn’t examine Likefolio’s credibility in detail but its calls seems to have been correct in the past. It called out Snaptchat’s redesign in 2018, which ended up being correct.
MoffettNathanson lowers US ad spend growth for 2025 to 5.8% from 7.2%
MoffettNathanson lowered their 2025 growth estimates for US advertising spend to 5.8% from 7.2%.
They lowered their estimate for online advertising to 10.9% from 13.0%.
The firm said its new outlook is based on public consumer companies reporting softer outlooks and advertising channel checks, where clients are becoming hesitant to deploy media spend amid growing uncertainty.
MAGNA reduces its 2025 ad market growth forecast from +4.9% in December 2024 to +4.3%.
MAGNA anticipates that the lack of visibility and risk of a trade war may cause marketing and advertising budgets to face freezes or cuts in industries that are most vulnerable to global trade, supply chain disruptions, and consumer confidence issues.
MAGNA expects negative GDP growth for the first quarter. The uncertainty will also lead to cautiousness in investment and marketing spending decisions for the months ahead.
CPG (food, drinks, personal care), quick-service restaurants, and autos are tied to global supply chains and prices, while also facing consumer scrutiny. They represent a sizable share of ad spend.
In contrast, other large industries like Pharma, Retail, Tech/Telecom, Entertainment, Finance, and Insurance are large, growing, and less sensitive to global costs or economic cycles.
Endemic and organic drivers (e.g. retail media, ad-supported streaming) have boosted ad spend beyond economic growth and will keep advertising formats attractive, encouraging steady or growing brand investment.
Temu is said to have been one of the largest spenders in Meta Platforms. According to the Wall Street Journal, Temu spent $2 billion in Meta ads in 2023.
Pathmatics, is a digital advertising intelligence platform owned by Sensor Tower, which served over 250 brands, media companies, and advertising agencies as of 2021.
