After a 12.4 percent increase in 2024, the U.S. ad market is expected to encounter a slowdown this year, according to MAGNA, due to the “uncertain economic environment.”
U.S. ad spend hit $380 billion in 2024, with the 12.4 percent boost being the best performance in 25 years, second only to the post-Covid rebound of 2021. Ad-supported streaming was a key driver, rising by 19 percent to almost $11 billion.
Looking ahead to this year, MAGNA says that a “lack of economic visibility and a decline in confidence may impact marketing and advertising budgets in the short term.”
Nevertheless, MAGNA highlights organic growth factors, including ad-supported streaming and AI. Media owners ad revenues are expected to rise by 4.3 percent this year, down from the previous forecast of 4.9 percent. Adjusting for 2024’s cyclical events–elections and the Summer Olympics—ad revenue growth in 2025 is revised from 7.3 percent to 6.7 percent.
Digital pure players are expected to see a 9.6 percent gain in ad revenues to $293 billion, while traditional media owners, including TV and premium long-form streaming, may see a decline of about 1 percent to $103 billion. Cross-platform national television sales (linear and streaming) are expected to remain stable at around $46 billion, with a 14 percent gain in ad-supported streaming helping to offset a 7 percent decline in linear.
Vincent Létang, executive VP of global market intelligence at MAGNA and co-author of the report, commented: “The combination of a strong, stable economy and ongoing media/advertising innovation drove record ad spend growth in 2024. Innovation will continue into 2025, and most economic fundamentals remain healthy. However, confidence plays a crucial role in marketing and advertising investment decisions. The current—hopefully temporary—dip in confidence has already dampened the dynamics of the ad market, prompting us to revise our growth forecast for 2025. While total ad spend is still expected to grow in the mid-single digits, digital media ad sales will continue to experience high single-digit growth. In contrast, most traditional media channels may face stagnating ad revenues this year.”
