• by Joe Mandese  @mp_joemandese, March 28, 2024

Citing improving macroeconomic indicators, IPG Mediabrands' Magna unit this morning released a new quarterly update to its U.S. ad-spending forecast, revising both 2023's final estimate, and 2024's outlook upward.

Magna's revised estimate for 2023 U.S. ad spending jumps more than two percentage points -- from the 3.6% growth it forecast in its last update in December to 5.7% now.

Magna's 2024 outlook increases nearly a point from +8.4% in December to +9.2% now.

Magna's revisions boost the Big 4 holding company ad forecast consensus up half a point to 3.6% for 2023 and up three-tenths of a point to 7.1% for 2024 (see above).

"Macroeconomists are more optimistic about the economy in 2024 than they were a few months ago," Magna Executive Vice President-Global Market Intelligence Vincent Létang writes in the new report, adding: "In the Philadelphia Fed’s latest report, released in February, economists increased 2024 real GDP growth expectations from +1.7% (November update) to +2.4%.

"In fact, the economic consensus on 2024 GDP growth has now increased in the last three updates, from a mere +1% back in May 2023. Other macro indicators are generally encouraging too. Economists expect consumer price inflation to slow down to 2.5% (incl. food & energy) from 9% mid 2022 and still 3% and 4% in January and February. Slower inflation contributed to a significant improvement in consumer sentiment in the last three months. The University of Michigan index stood at 77 in March 2024, compared to 50 in mid-2022 (when inflation peaked) and only 61 in November 2023.

The report does note that within the ad industry, some key categories continue to lag, especially entertainment (-4% estimated growth for 2024) and technology (-1%), but the overall mix is a net positive for U.S. advertising expansion.

Magna's update follows several other recent positive secular indicators, including this week's release of Guideline's U.S. Ad Market Tracker index, which reported that U.S. ad spending expanded 10.4% in February, the first double-digit growth since March 2022.

And former Magna -- and GroupM -- forecaster Brian Wieser, now publisher of Madison and Wall, on Monday upgraded his U.S. ad-spending outlook for 2024 for the second time since benchmarking it in December.