GroupM issued a revised ad-spending forecast today for the U.S. predicting underlying growth (which excludes political advertising) of 5.8% for 2019.
That’s just slightly lower than the 6% underlying growth GroupM says the U.S. market achieved in 2018.
The WPP media unit also forecast underlying growth of 4.8% for 2020.
However, political dollars provide a significant boost to the growth figures. When political is factored into the 2018 numbers, growth reached 9.5%, which will result in a corresponding drop in growth this year to 2.8% with less political spending activity.
Political spending in 2018 was a record $9 billion, according to the GroupM tally.
In 2020, a presidential election year, the overall growth is expected to be 8.2%, with an estimated $10 billion in political spending.
“Extreme variation in growth rates has become the norm in the U.S. advertising industry, as political advertising itself is causing mid-single-digit swings of growth and decline from year to year,” wrote Brian Wieser, global president of business intelligence for GroupM.
Wieser attributes much of the recent and forecast growth to newer advertisers. “All this growth is occurring as many of the world’s advertisers who were historically among the largest appear to be struggling, especially in fast-moving consumer goods sectors where low-single-digit (or less) growth has been an industry norm in recent years. Their struggles have occurred for many reasons, but an inescapable observation is that relatively new companies and related products have to some degree displaced what came before them.”
Newer digital ad platforms like Google, Facebook and Amazon (among others) are now major advertisers as well, Wieser notes.
GroupM also predicts that digital growth is likely to decelerate. Growth in 2018 was about 23%, while growth this year is expected to be 15%, followed by 16% in 2020.