IPG Mediabrands revised its 2022
and 2023 U.S. ad-growth estimates once again, bringing last year's estimates down to 7.2% and this year's to 3.4%.
It is Magna's sixth revision since it first benchmarked 2022 in its June 2021
forecast, which ultimately jumped up to a high of 13.0% in its giddy "planets realigning" forecast in December 2021 and has trended downward ever since.
Magna's 2023 outlook, which was first
benchmarked at 10.2% in June 2022, now stands at about a third of that -- 3.4%.
Magna, which is the only one of the Big 4 agency holding company forecasting units to publicly release quarterly
forecast updates, has only impacted MediaPost's agency consensus marginally. It currently stands at projected growth rates of 9.8% for this year, 4.3% for 2023, and 7.7% for 2024 (see bottom).
Despite taking its U.S. ad outlook down eight-tenths of a percentage point from its December forecast, Magna Executive Vice
President-Global Market Research Vincent Létang described 2022 as a "decent year" that nonetheless "stalled in the second half."
“In a similar economic climate, ten or
twenty years ago, the U.S. advertising market would almost certainly fall off a cliff," Létang stated, echoing an ongoing theme expressed by other forecasters -- most notably GroupM's -- that
the ad economy has been decoupling from the general economy.
"Things are different in 2023, because of media innovation fueling marketing demand," he continued, noting: "The organic drivers
that boosted the ad market in 2021 and the first half of 2022 are still around and mitigating the impact of stressful economic signals. Such organic drivers include the rise of retail media networks
which are redirecting billions of marketing budgets dollars into advertising formats. In addition, with long-form OTT streaming going mainstream and increasingly ad-supported, brands finally find
cost-effective solutions to reconnect with audiences that had become hard and expensive to reach through linear television. These are some of the reasons why advertising spending continued to grow in
the second half of 2022, despite economic uncertainty, war, inflation, and very high growth comps. For the same reasons, Magna expects advertising activity to continue to grow, albeit at a slower
pace, in 2023. An additional growth factor for 2023 is the recovery of the automotive market, a top five vertical for most media types in America”.
Despite its downward revisions,
Magna's current 7.2% growth projection for 2022 is still more than twice the amount estimated by a MediaPost January analysis of data from Standard Media Index estimating that
actual ad spending by major agency holding companies and independent media services agencies rose only 3.2% in 2022.
