“Presuming that the overall economy doesn’t go into a recession or downturn, I would assume no change to the dynamic of money flowing into the U.S. from China or elsewhere abroad, which is a factor that’s really important,” Wieser told Adweek.
Now, the advertising industry’s economics are stabilizing, according to Wieser. This year’s projected 5% bump would indicate the advertising industry is healthy.
Marketers should consider the full picture, argues Wieser in the forecast report. With category expansion mostly complete, it’s unlikely that new channels will appear as suddenly as they did during the pandemic and snag more of marketers’ dollars.
Last year, marketers, spooked by a recession that would never really materialize, held onto their budgets. Many agencies, worried by the prospect of another downturn, laid off employees. The squeeze made little sense, according to Wieser, especially since high inflation should have positively impacted ad spend.
Wieser on what‘s ahead for marketers:
- Industry growth normalizes: Wieser anticipates the industry will see 6% growth in this year’s third quarter, followed by 8% growth in the fourth quarter. These numbers are relatively inflated compared to previous years, but by the end of the year marketers can expect quarterly growth to relax. Pre-pandemic yearly growth between 4% and 5% will become a standard, even good, result. To conclude this, Wieser assumed GDP and personal consumption growth between 1% and 2%. Political advertising may cause growth to swing quite dramatically, he noted, between 3% and 4% growth percentages, and impact every advertising channel.
- Digital spend keeps platforms growing: Digital platforms, including search, social media, retail media and others like YouTube, Yahoo and Apple, make up 64% of digital advertising investments, the forecast concludes. These platforms will continue growing this year to the tune of 11%, according to Wieser. That’s relatively on par with 2022’s overall growth for the category, and far outpaces the industry’s projected 5% total growth.
- Retail media reigns: Investments in retail media and commerce should add up to $42 billion this year. That’s up 20% from 2022, underscoring how quickly retail media became a dominant advertising channel. Amazon and companies like Walmart, Instacart, eBay, Uber, Criteo, Booking.com and Expedia stand to benefit, according to Wieser.
- Publishing margins plummet: In the coming years, publishing will realize mid-single-digit declines. That’s even as digital-only publications stoke the category, making up for dwindling investments in the print category. Ad tech, though, will become an unlikely winner amid these declines. Wieser estimates the category will grow faster this year, assuming media buyers’ increased reliance on programmatic trading.
- Things get worse for TV: Economic circumstances are not getting any better for the television sector, which is experiencing “an existential crisis,” Wieser wrote in the report. Cord cutting, coupled with marketers’ new investments in streaming platforms, are to blame. And by the end of this year, buyers will feel the effects of this year’s SAG-AFTRA and Writer’s Guild of America strikes. Fewer shows mean fewer available advertising spots. Local TV will also suffer, Wieser forecasts, with single-digit declines on the docket. Political advertising will offset declines in the immediate future, though, as campaign advertising heats up throughout the 2024 U.S. presidential election cycle.
