Commentary

Magna Upgrades U.S. Forecast For 2017

Magna forecasts U.S. media owners' net advertising revenues to grow by 3.6% this year (excluding the impact of political and Olympics advertising) to reach $185 billion, which the Interpublic intelligence arm said would be a record.

The latest update represents an upgrade from the firm’s June forecast, in which it predicted an increase this year of 3.4%. That’s not a huge upgrade, but hey -- a fraction here, a fraction there and you’re talking real dough.

Still, growth will definitely be less robust than last year’s 5.9% increase. But the firm noted that next year, the pace will pick up again with expected growth of 4.7%. That's thanks in part to midterm elections, the Winter Olympics and soccer’s World Cup.

U.S. advertising sales grew by 4.2% in the second quarter of 2017, picking up some steam after tempered growth in the first quarter of 3.2%.

Second-half 2017 growth of 3.5% (that’s the estimate for both the third and fourth quarters) is now expected by the firm.

Digital ad sales for the first half grew by 17%, down a bit from the 20% gain realized in the first half of 2016.

For the full-year 2017, digital formats are currently forecast to rake in $84 billion -- up 16% -- while offline media sales will fall by 5% to $101 billion, according to Magna’s latest reading of the tea leaves.

Video and social remain the fastest-growing digital formats, per Magna, which reports that social media ad sales grew 39% in the first half. Within social, video ad format sales will more than double this year -- reaching $4.8 billion -- or about 22% of the total social media ad market of $22 billion.

Mobile ad sales will grow by more than $13 billion this year for a total of $49.5 billion, accounting for 59% of digital ad sales in 2017.

National linear TV ad sales fell nearly 3% during the first half of this year as ratings dropped. Local TV and radio sales (excluding political) were also down, while out-of-home was flat.

 

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