MAGNA: Online Ad Market to Jump 14% This Year

Mon Jul 3, 2017

Kathy Crosett

Last week, we reported on the somewhat optimistic midyear ad market outlook from Zenith. MAGNA is also out with its annual midyear report, which is a bit more conservative. The analysts at MAGNA expect a 2017 global ad market of $505 billion, which MAGNAis a 3.7% increase over last year. Here’s what’s in store for specific media formats and for the U.S.

MAGNA analysts say the slower global ad market is largely attributable to U.S. factors. This year, U.S. ad spend is on track to grow 1.6% and reach $185 billion. The growth rate pales in comparison to last year’s rate of 5.9%. However, part of last year’s activity was the result of cyclical advertising related to the Olympics and the election. Removing those factors from the equation, analysts say the U.S. ad market will actually grow 3.4% this year.

While online ad sales will shine, traditional media formats will face challenges as outlined below.

Local TV – In comparison to last year’s numbers, local TV advertising will be off by at least 3%. The lack of political money and slower activity in the automotive, restaurant and retail sectors are to blame. The better news is that mid-cycle elections could drive local TV ad demand up by 10% in 2018.

Radio – Demand for broadcast linear radio ads may fall by 4.4% in 2017, to $13.4 billion. A weakening in automotive, retail, and finance/insurance is to blame for this drop.

Out-of-home – This traditional media segment may experience a growth rate of up to 2% this year and come in at $7.9 billion. While OOH is facing the same softness in the automotive and retail ad market, tech buyers have been driving up demand in this sector.

Digital – This format will remain the growth engine for the ad market in the U.S. and likely experience a jump of 14% in 2017.

Here’s a breakout for ad spending by media format as MAGNA sees it:

Traditional $102 billion

  • National TV $43 billion
  • Local TV $20 billion
  • Print $18 billion
  • Radio $13 billion
  • OOH/Cinema $8 billion

Digital $83 billion

  • Mobile $48
  • Desktop $35
  • Social $21
  • Search $40

As media sales reps work to reach quotas this year, they should be prepared to face increased competition in the traditional ad market. Reaching out to a broader range of prospects could generate more revenue. In addition, packaging digital with traditional formats will allow reps to boost sales while marketers can connect with more consumers.

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About Kathy Crosett

Kathy is the Research Director for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel.

View all posts by Kathy Crosett
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