Update Shows U.S. Ad Deflation Bottoming Out, Pricing Poised To Rebound In '24

Just as U.S. consumer price inflation appears to be flattening out following a period of protracted increases, media price inflation paid by advertisers has moved in the opposite direction, according to a new quarterly update from ECI Media Management.

The U.S. data estimates ad-supported media prices in the U.S. dropped sharply throughout 2023 -- from +6.6% in the first quarter to -5.1% in the second quarter.

The analysis attributes U.S. ad-price deflation mainly to the impact of the Hollywood strikes, which have been settled, but won't impact the ad marketplace until the first quarter of 2024.

As a result, ECI projects U.S. ad-price deflation has bottomed out and media prices will rebound in 2024 due to the resumption of premium content -- especially for TV and streaming/CTV -- as well as the impact of surge in political ad spending and big international sporting events throughout the year.



"Some advertisers may even be holding back spend at the end of 2023 in anticipation of these opportunities to drive higher reach in 2024," ECI's analysts note.

However, the outlook for the rest of the world's advertising markets remains uncertain due to the "global economic situation," according to the update, which notes:

"According to the IMF, global recovery continues to be slow, with the baseline forecast for global growth decreasing from 3.5% in 2022 to 3.0% in 2023 and 2.9% in 2024 – significantly below the historical average of 3.8% for the period 2000 to 2019.

"Growth is even slower in advanced economies, at 2.6% in 2022 to 1.5% in 2023 and 1.4% in 2024, thanks largely to the impact of policy tightening. More positively, global inflation is also declining, from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024."

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