SMI: Market Data Implies 'Normalization,' Not Necessarily Recession

While the U.S. ad market declined for the fifth consecutive month in October, signaling signs of a new advertising recession, a longer view suggests it is more of a stabilization than a downward correction.

"[We see] this less as recessionary fears and more as the ad sector normalizing from an overly hot last year," Standard Media Index says in its own analysis of the core data it processes from the major agency holding companies' actual media buys.

"In the last months of 2021 and even Jan-Feb 2022, advertisers were spending ~20% up over 2020, whereas 'normal' ad market growth for decades was in the 2-5% realm," the analysts explain, adding, "This October is still up a healthy +6% compared to 2020 and +8% over 2019."

That said, on a year-over-year basis, most major media have been taking hits, with the exception of out-of-home, which continues to rebound at healthy double-digit rates throughout the year -- and especially when looking at the medium's growth over the past two years.

 And while "digital" media also continues to show sustainable growth, it has begun decelerating into the mid- to low-single-digit growth range in the most recent quarters.

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