PORTLAND, ORE. — When it comes to fully assessing where U.S. media advertising is heading, Brian Wieser, founder of Madison & Wall, is perhaps one of the nation’s foremost analysts. He’s taken a close look at the advertising economy over the last few months, and Wieser’s assessment is a positive one: He’s raised his expectations for the advertising industry in 2024, but is broadcast media along for the ride?
Not necessarily.
Wieser now forecasts that Q1 2024 will expand by 8.0% excluding political advertising.
For the full year of 2024 Wieser expects 5.6% ex-political growth.
That’s a rise from Q1 ’24 growth of 7.0% and full-year expansion of 5.2% on a comparable basis.
Why is Weiser more positive about the market than he was before? “Future economic expectations, which I already viewed positively throughout 2022 and 2023, have improved noticeably,” he says in a newly released report.
Wieser establishes his assessment by first looking at GDP forecasts for 2024, which he says in real terms were up by nearly a percentage point in February versus November in the Philadelphia Federal Reserve’s most recent Survey of Professional Forecasters’ release; implied nominal GDP expectations are approaching 5% for 2024 versus closer to 4% previously.
Looking beyond 2024, with forecasts of 4%-5% over subsequent years in nominal terms, presuming personal consumption expenditures (which historically correlate more strongly with advertising than GDP) grow by a similar amount, Wieser says, “A 4%-5% baseline continues to feel like the right starting point through 2028.”
At the same time, Wieser adds, there is a “double-edged sword” of opportunity and risk associated with the so-called Chinese export market which could either help or hurt the ad market in 2024 and beyond.
“On a more immediate basis, to the extent that the easy comparables of the fourth quarter of 2022 provided a good chunk of the ‘lay-up’ for the massive growth we anticipated for the fourth quarter of 2023 — which grew by 11.1% excluding political advertising, ahead of my 9% forecast— something like that should be evident in the first quarter of 2024 as well,” Wieser says.
Thus, with an assessment that Q1 2024 “shouldn’t be dramatically slower” than Q4 2023, Wieser is increasing his expectations for growth. Meanwhile, Wieser is anticipating $15.5 billion in political advertising across all media in 2024, up from $14.1 billion in 2020.
But, what about on a media-by-media basis? “I expect the shifting budget shares that have been playing out through 2023 to broadly continue,” Wieser says. “Those shifts should include ongoing share gains for digital advertising, modest share losses for outdoor advertising and bigger share losses for audio, television-based media companies
and publishers of content with roots in print.”
In particular, Wieser believes Audio advertising “likely declines” by 1% to 2% each year, including digital platforms such as Spotify and podcasting, too.
With digital and social media each taking a big chunk of the ad-dollar pie, where does that leave Television? On a national level — including the connected TV arena — challenges will persist.
Wieser forecasts a decline in ad revenue of 3.5% in the first quarter of 2024 and a 3.2% dip for the full year.
“I think this figure will be propped up modestly by the Summer Olympics, which likely retains much – if not more – of the appeal it has always had to advertisers,” Wieser says.
For local TV, “ex-political advertising should post worse results than what we will see at the
national level in 2024, although some of this is because of the dislocation of budgets that occurs when political spending is as high as it will be during an election year,” Wieser concludes. “Longer-term trends probably look much the same for local sellers as they do for national ones.”
Interested in receiving the full forecast model, including quarterly historical and future-looking estimates for each of dozens of media formats from 2018 through 2028 as well as
annual figures beginning with the year 2016? Brian Wieser may be contacted at [email protected].
