Amid concerns of a looming U.S. economic downturn, the U.S. ad market expanded 7.6% during the first
half of 2019 and is on track to grow a total of 6.3%, according to revised estimates released today by IPG Mediabrands' Magna unit.
That is a significant improvement from the 2.4% U.S. ad
expansion Magna predicted back in December 2018, when it released its last forecast.
“The U.S. ad market had a great first half thanks to a strong economic environment as well as media
innovation and a dynamic technology vertical," Executive Vice President-Global Market Intelligence Vincent Letang said in a statement provided with the report. "Digital media ad sales matured, as
expected, but continued to grow close to +20% yoy, while editorial media performed better than expected thanks to a recovery of radio, and OOH in full swing. We forecast an 11th year of growth in 2020
as record political spending will generate an all-time high of $5.5 billion in incremental ad revenue and mitigate the effect of the expected economic slowdown."
For 2020, Magna is
forecasting a more tepid 3.8% expansion in U.S. ad spending, despite the fact that it is expected to be a banner year in political advertising, as well as being an Olympics year.
expecting the economic slowdown might take a toll on the spending in several key verticals (e.g. automotive, retail, finance), but fortunately, 2020 is the strongest year in the four-year cycle of
events that typically drive extra ad spend and incremental ad revenues," the Interpublic unit says in the report, which goes on to note U.S. GDP growth is forecasted to "slow down only mildly from
+2.3% in 2019 to +1.9% in 2020."