IPG Mediabrands' Magna this morning became the latest of the big agency holding company forecasting units to revise its 2023 advertising growth outlook downward, albeit slightly, for both the U.S. and worldwide.
Magna revised its U.S. growth forecast down nearly a percentage point to 2.5%, from the 3.4% it had been estimating when it released its last quarter update for the U.S. in March.
Magna revised its global ad-growth forecast for this year down two-tenths of a point to 4.6% from the 4.8% it estimated in its year-end outlook in December 2022.
Magna's updates come on the heels of GroupM, which revised its U.S. outlook down four-tenths of a point to +5.1%, but kept its 2023 global forecast unchanged at +4.6%.
"Advertising spending slowed down to a halt in the first quarter of 2023 (+1.5% globally, flat in most Western markets) due to economic uncertainty and the lack of cyclical drivers," Magna Executive Vice President-Global Market Research Vincent Létang states, adding: "There are, however, some drivers mitigating the impact of economic slowdown: Ecommerce and Retail Media bringing more marketing dollars into digital advertising formats, and the counter-cyclical dynamic of some large industry verticals (Retail, Auto, Travel). On balance, MAGNA expects the global marketplace to keep growing this year, as it managed to do during the brutal COVID recession of 2020. But of course -- like in 2020 -- traditional media formats and mature markets will struggle this year. Innovation keeps the market moving, however: traditional media owners are developing cross-platform capabilities and brand-safe addressable solutions that are increasingly attractive to brands, and now account for 19% of their advertising revenues."
Magna's update revised MediaPost's Big 4 agency consensus outlooks to +6.3% worldwide and +2.9% for the U.S. in 2023.
For 2024, the consensus revises to +6.3% worldwide, and +7.6% for the U.S., which will have an Olympics and presidential elections to stimulate domestic ad spending.