One of the advertising industry’s top forecasters has tempered its expectations for ad spending in the U.S., citing a foggy economic outlook and a downturn in consumer confidence.
Magna, a media-research unit that is part of the IPG Mediabrands division of the ad-holding giant Interpublic Group, has called for U.S. ad sales to reach $397 billion this year, an increase of 4.3% from 2024 when factoring in cyclical events such as last year’s election season. But in December, Mediabrands projected growth of 4.9% for the year.
“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 U.S. to revise our growth forecast for 2025,” said Vincent Létang, executive vice president of global market intelligence at MAGNA and co-author of the report, in a statement. “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.”
The Trump administration’s interest in levying tariffs on many countries has dampened the stock market and softened Wall Street’s outlook. for growth
When adjusting for cyclical spending in both years — taking into account irregular dynamics such as political advertising and the Summer Olympics in 2024 — non-cyclical ad revenue growth in 2025 was revised t0 6.7%, compared with a previous estimate of 7.3%.
The report surfaces just weeks ahead of the media industry’s annual “upfront” sales season, when U.S. TV networks try to sell the bulk of their commercial inventory tied to their next cycle of programming. If advertisers are worried about consumer confidence and willingness to commit to purchases, it could affect their willingness to invest in media months ahead of the time when their ads would be scheduled to run.
Magna projected a 9.6% increase in ad revenue for digital media outlets that specialize in everything from search and social media to digital video and digital audio, with total spend reaching $293 billion. Ad sales for traditional media owners of TV, streaming, print, out of home and cinema assets, could fall 1% to $103 billion. Magna called for cross-platform national TV sales to remain flat at about $46 billion, with a 14% jump in ad-supported streaming helping to offset a projected 7% decline in ad sales tied to linear viewing.
