Spending on digital video advertising is expected to jump 16% to $62.9 billion in 2024, according to a new forecast from the Interactive Advertising Bureau.

The increase follows a 15% jump in 2023 and a 21% hike in 2022 and will easily outpace the growth in total advertising spending, IAB said.

In terms of spending on TV and video advertising, the IAB expects most spending to be on digital for the first time, with a 52% share, compared to a 48% share for linear TV. In 2023, linear TV had a 52% share of ad dollars, with digital garnering 48%.

Spending on connected-TV advertising is seen growing 12% in 2024, while online video climbs 18% and social video jumps 20%.

The IAB worked with Advertiser Perceptions and Guideline on its 2024 Digital Video Ad Spend and Strategy Report.

In a survey of advertisers and media buyers, more considered social media and CTV a “must-buy” than national broadcast and cable TV or local broadcast and cable TV.

The buyers said the ad dollars they were spending on CTV were being reallocated from linear TV and other nonvideo digital ads.

Three-quarters of CTV buying is now being done using programmatic technology.

Buying CTV programmatically made it easier to optimize campaigns, produced better return on ad spending and made it easier to achieve scale, respondents said.

Buyers also said they now evaluate campaigns by looking at outcomes, such as sales and store visits. 

The survey found both widespread interest in and adoption of alternative currencies, with 89% of advertisers saying they’ve either transacted, tested or discussed the use of alternative currencies and 28% saying they’ve transacted on nondemographic metrics.

Alternative currencies still face some challenges. Buyers said they are too expensive and lack standardization and historical benchmarks. They also faced difficulties with planning for multiple currencies.

“As the saying goes, ‘With great power comes great responsibility,’ ” IAB CEO David Cohen said. “With the continued impressive growth of digital video comes demands for better measurement, viewability, standardized data and placement transparency. The video ecosystem must fully commit to innovation, especially in measurement.”

Retail Media and connected TV are expected to be big engines for digital advertising growth in 2024, according to the inaugural U.S. ad spending forecast from Advertiser Perceptions.

Digital ad spending, which has eclipsed spending on traditional media, is expected to increase 10% in 2024 after rising 11.7% to a record $283 billion in 2023. Advertisers Perceptions also sees digital spending  increasing10$ in 2025.

Retail media is expected to jump 30% to $64.7 billion in 2024 and rise to $81.6 billion in 2025, representing 23.5% of all digital advertising in the U.S.

“Brands have been pouring money into retail media over the past few years,” said Eric Haggstrom, director of business intelligence and head of forecasting for Advertiser Perceptions. 

“While we expect this trend to continue, retail media will evolve significantly in the coming years. As ad auctions on retailers’ own properties become saturated, brands will look to utilize retailers’ data to power their buys outside of retailers’ digital walls,” Haggstrom said. “Media and ad tech companies need to form relationships with retail media platforms or risk missing out on one of the few large and quickly growing segments of the digital advertising market.”

The presidential election and the Olympics are expected to push the growth of connected TV advertising. Advertiser Perceptions forecasts a 16.2% increase in CTV spending in 2024. 

“This is a conservative estimate, however, as spending could be driven higher by the election and more success by Amazon Prime Video’s ad tier,” the company said. 

Spending on social media is expected to grow by 14% in 2024 and 11.8% in 2025.

Most of the increase is seen coming from spending on short videos on TikTok, Instagram Reels and YouTube Shorts. 

Advertiser Perceptions said it expected programmatic spending on mobile, and desktops to be flat to up single digits.

 “The advertising market will be strong in 2024, buoyed in large part by the presidential election and the upcoming Olympics,” Haggstrom said. “Retail media, social media and CTV will be the biggest drivers of growth over the next two years, as advertisers not only prefer both the targeting and creative opportunities available through these digital channels but also can prove the ROI.”

Advertiser Perception based its report on an analysis of financial reports from more than 100 publicly-traded companies involved in ad sales, the largest ad buyers in the world, research from government statistical organizations, and years of Advertiser Perceptions syndicated research.

Paramount Global CEO Bob Bakish provided more testimony that the advertising market is weaker heading into the end of the year.

Speaking at the UBS Global TMT Conference in New York Tuesday, Bakish noted that Paramount had forecast that fourth quarter ad sales would be in line with the third quarter performance. 

"We do now see the fourth quarter coming in a bit below the third quarter," Bakish said. Paramount reported that advertising revenues were down 3% to $1.974 billion in the third quarter.

"The current market is challenging and we’re in it every day. That challenge is both on the linear side and the digital side," he said. "We had looked for some improvement in some sectors, but we haven’t seen that."

Bakish said that Paramount was in the process of reorganizing its ad sales division to give the large media buying holding companies a single point of contact, a move that will make it easier for them to transact.

The problems in the ad market are giving Wall Street a reason to downgrade media stocks, but Bakish said that advertising was an important part of monetizing content.

"While challenging, the ad business is cyclical," he said. "This too is cyclical. It will turn. I can’t tell you exactly when it will turn, but when it does, you’ll see to power of the portfolio of assets we have." 

Paramount stock finished Tuesday at $18.15 a share, down 6.97%. ■

Media agency Magna Global reduced its forecast for U.S. advertising spending because of the from Russia’s invasion of Ukraine.

Magna now expects U.S. ad spending to increase 11.5% to $320 billion. Its original forecast was for 12.6% growth. The war in Ukraine has exacerbated supply chain issues and inflationary pressures.

National TV revenues, which Magna defines as cross-platform national long-form video, will be down about 1%. Traditional TV ad sales will be down about 5%, while ad-supported video on demand, over-the-top and connected TV revenues will jump 27%.

Local TV will be getting a huge boost from the midterm elections. Magna estimates that media owners will generate $6.2 billion in incremental advertising revenue from political campaigns, up 41% from 2018 (that’s up from the previous forecast of a 31% increase). Local TV will get $4.2 billion of that, up 26% from 2018, while digital media gets $1.45 billion.

Also: Magna Sees U.S. Long-Form Video Ad Revenue Rising 4% in 2022

Overall, local TV ad revenues are expected to grow 16% in 2022, according to Magna.

“The Ukraine crisis has already hit consumer and business confidence. It will slow down economic growth in 2022 and fuel the inflationary trend. It is too early to assess the depth and length of economic repercussions, but Magna believes the U.S. economy is strong enough to weather this new challenge,” said Vincent Létang, executive VP, global market intelligence at Magna. 

“Looking at marketing and advertising, the macro-economic headwind will be mitigated by continued organic drivers (innovation, emerging verticals, ecommerce) and stronger-than-expected political fundraising (leading to at least $6 billion in incremental ad spend),” Létang said. “Balancing all factors, Magna reduces its 2022 advertising revenue growth forecast by one percentage point, as media owners’ ad revenues will grow by 11% this year to pass the $300 billion milestone for the first time”.

Technology, telecoms, entertainment, travel and betting are among the categories expected to grow faster than average, while automotive continues to struggle with supply chain issues.

Magna sees digital media growing 16% in 2022. Search is seen increasing by 17% and social will be up 16%. ■

Local television ad revenue is expected to grow 28.4% in 2022, according to BIA Advisory Services, which has raised its forecasts based on a strengthening outlook for political and digital activity.

TV station over-the-air revenue will grow to $21.37 billion in 2022 from $16.64 billion in 2021, with station digital revenue climbing to $1.87 billion from $1.59 billion, BIA said.

BIA expects overall local advertising to grow 11.4% to $173.3 billion. It previously predicted local ad revenue to be $161.5 billion in 2022.

TV is expected to get a large share of political advertising, expected to approach $8.4 billion in a mid-term year. TV will get a large share of that spending, particularly in  the Fairbanks, Alaska; Augusta, Georgia, and Tucson, Arizona markets.

TV and other traditional media will gather $88 billion, or 50.8% of local revenue, versus $85 billion, or 49.2% for digital.

Over the top is seen growing 57.5% this year as consumers continue to embrace various streaming services on their TV screens, BIA said.

“2021 has been a year of fluctuations,” said Mark Fratrik, senior VP and chief economist, BIA Advisory Services. “The first two quarters of the year saw strong growth, with some stalling in Q3 once the Delta variant appeared late summer. We’ve taken pandemic concerns plus inflation and supply chain issues into account to prepare our local media estimates and, overall, we are bullish on ad revenue for 2022.”■

Media buyer GroupM predicted that U.S. TV ad revenue will grow 6.2% to $74.168 billion in 2022, after rising 4.1% in 2021, a historic year for overall advertising revenue growth.

The bright spots for the industry are CTV and political spending. GroupM sees CTV growing 23% in 2022. And the agency expects candidates and interest groups to contribute about $7 billion to TV revenues during the mid-terms. 

 Also: U.S. TV Ad Spending To Rise By 4% in 2022, Zenith Forecasts 

Political advertising is increasingly important to the TV business. “We expect that by 2026, political advertising will account for more than 13% of all TV advertising, up from 9% in 2020, with heavy concentrations of demand directed to a relatively modest number of local TV markets, the agency said in its report, entitled This Year Next Year--Global End-Of-Year Forecast.

GroupM notes that pay TV subscriptions continue to fall, limiting the reach potential of ad-supported TV. That trend is more pronounced in the U.S. than in other markets.

 Also: Magna Sees U.S. Long-Form Video Ad Revenue Rising 4% in 2022 

“Nonetheless, television will hold its own weight in absolute terms, as the defections of some advertisers will be offset by the emergence of others, while ongoing growth in political advertising...helps sustain the overall sector’s durability on a multi-year basis,” the agency said.

With U.S. TV companies investing in streaming, revenues are rising for both subscriptions and connected TV. GroupM said what it calls CTV plus ad revenue will be $16.6 billion in 2021 and rise to $20.3 billion in 2022. By 2026, CTV-plus ad revenues will hit $32.6 billion.

Over all, Magna has raised its estimate for growth total 2021 media industry ad revenue to 22.7% from a prior forecast of 17.3%. Naturally the increase is led by digital advertising. For 2022, the agency sees U.S. ad revenue rising 14.6%. Excluding political advertising in 2022, underlying growth would be 28.4%.

‘It’s possible that this is the fastest growth in the history of advertising,” said Brian Wieser, global president for business intelligence at GroupM.

Wieser noted that 64% of global advertising is now digital, but that larger, more sophisticated advertisers are still spending 40% to 50% of their ad buffets on television.

That’s “not because they're dinosaurs necessarily. But because large brands can use television. They can make TV work. They can take advantage of the brand building capacity and more importantly, they have the budgets to do it,” he said.

Between TV and digital most of the spending and growth is accounted for. “Yes, that does mean crumbs for everyone else,” he said.

The growth in spending is coming despite the global supply chain issues and despite concerns about inflation, which might actually be good for ad revenue because spending is often based on sales volume, and both phenomena could lead to people buying more higher-priced goods. “As long as consumers are willing to spend more money, there will be more advertising," Wieser said.

GroupM sees global ad revenue growing 9.7%, excluding U.S. political advertising. That’s up from Group M’s prediction of 8.8% in June.

Digital advertising accounted for 53.4% of all advertising in 2021, up from 60.5% in 2020, with Alphabet, Meta and Amazon accounting for from 80% to 90% of the global total. ■

Advertising spending on TV in the United States is expected to increase 4% to $65.151 billion in 2022 from pandemic lows, but growth will be limited and pale compared to digital video, according to a new forecast from media agency Zenith.

On a worldwide basis, Zenith sees social media spending eclipsing spending on TV in 2022.

Helped by a presidential election, U.S. TV ad spending will rise to $67.234 billion in 2024, but will still be short of its peak of $68.457 billion in 2017.

Zenith expects that after growing just 1% to $16.351 billion in 2022, network TV spending will be flat in 2023 and 2024. Similarly, the agency sees national cable and syndication basically flat from 2021 to 2004.

 Also: Magna Sees U.S. Long-Form Video Ad Revenue Rising 4% in 2022 

Spot TV will climb 10% to $26.031 thanks to the midterms, fall back in 2023 and jump 18% to $28.113 in 2024.

While traditional TV stagnates, spending on internet video in the U.S. is taking off from $24.332 billion in 2020 to $34.219 billion in 2021 and $41.063 in 2022--up 69% over two years. By 2024, Zenith said spending on internet video will hit $52.899.

 Also GroupM Sees 23% CTV Growth, More Political Spending, Boosting TV 

“Brands need to make smart use of online video to mitigate television inflation,” Zenith said in its Advertising Expenditure Forecasts report.

“Television advertising remains the easiest route to mass audience brand awareness, despite years of audience losses to digital media. Brands’ reliance on television is fueling rapid media inflation, which will continue even after the comparison with 2020 has passed,” the report said. “We forecast the cost of television advertising to rise by 11% in 2022, compared to 4% for out-of-home, 3% for digital display, 2% for radio and zero for print. Brands will have to confront their dependence on a medium that consistently delivers smaller audiences for higher prices.”

Zenith forecasts that global ad spending will rise 9% in 2022 and hit $873 billion by 2004, with 48% of that growth coming from the U.S.

The biggest growth will come in social media at 15%, followed by online video at 14%.

Online video ad spend is expected to increase from $62 billion in 2021 to $91 billion in 2024, when it will exceed 50% of this size of television for the first time. Television ad spend will rise from $171 billion to $178 billion over the same period.

“COVID-19 setbacks have extended the period of heightened digital transformation,” Zenith said. “The pandemic has thoroughly disrupted shopping habits. Many consumers who would prefer to browse and purchase in person are shopping online by necessity. Businesses have responded by investing more than would otherwise have been justifiable in new technology, infrastructure, organizational change – and advertising. This includes brand advertising to promote ecommerce platforms, performance advertising to direct traffic to them, and advertising within these platforms (‘retailer media advertising’) to promote specific products, all of which have surged.”

Zenith expects the digital transformation to slow down, but not reverse, as the pandemic eases in 2022. Global spending on digital advertising is seen growing 14% in 2022.

Digital advertising as a whole will exceed 60% of global ad spending for the first time in 2022, reaching 61.5% of total expenditure, and will increase its share to 65.1% by 2024.

Zenith predicts social media will be the fastest-growing sector between 2021 and 2024, with an average annual growth rate of 14.8%. Social media ad spending will reach $177 billion in 2022, overtaking television at $174 billion, according to Zenith. Social media ad spending will rise to $225 billion by 2024, when it will account for 26.5% of all advertising.

“The platforms are also embracing commerce and developing new advanced interactions between brands and consumers. Brands can use self-serve tools to create Augmented Reality experiences and then distribute them through targeted advertising, which can powerfully lift awareness and intent to purchase,” Zenith’s report said. ■

Almost half of the growth in local video ad spending during the next five years will go to digital platforms, including local mobile video, local online video and out-of-home video, according to a new study on advanced television advertising published last week by BIA/Kelsey industry analysts.

The growth in digital platform advertising approximately matches the expected growth in local cable TV advertising during the period, the report, "Advanced TV: Industry Views on Progress & New Directions," concluded.

BIA/Kelsey's local ad forecast, compiled during July research, envisions $7.1 billion growth in local cable ad spending next year compared with $5 billion for local online, mobile and out-of-home video spending. In 2021, local cable ad growth will amount to $6.9 billion, while the combined local digital platforms will tally $6.7 billion.

The report -- the fifth in the company's series analyzing local digital video advertising platforms -- predicts that by 2021, local digital "ad activation" will represent 43.6% of local ad spending versus 56.4% for "traditional" video media. That's a significant jump from today's 33.2%/66.8% split.

In dollar terms, the study predicts that all local linear TV and digital video combined platforms will grow from $31.9 billion in 2017 to $37.3 billion by 2021. The broadcast TV segment will grow $2.7 billion and the cable/MVPD segment will grow by $200 million (see chart).

"We are seeing very interesting innovation in cross-platform solutions, audience targeting, local data management platforms and a drive toward more accountability in media campaigns," according to the BIA/K analysis. "These innovations may bend current trend lines in the media mix if linear video can become competitive."

BIA/K's report focuses on the increased use of data-enhanced audience targeting via addressable, contextual audience networks, over-the-top, connected TV and programmatic TV platforms, all of which the company said "continue to innovate, and bring change in the national and local TV markets through technology, data, and new forms of automation and efficiency."

The report includes extended interviews with six media and technology executives, including Steve Silvestri, vice president of advanced advertising at Discovery Communications; he oversees the 18-month-old Discovery Engage platform that leverages custom and syndicated data segments for the company's networks.

"The [Engage] platform has consistently showcased its ability to mine high value programs across the Discovery portfolio that may have been previously unconsidered, but now afforded through selling title optimization," Silvestri explained. "Most of our advertisers are purchasing audiences deeper across our portfolio and expanding their network consideration set."

He said that while a "traditional buy" might include four to six networks, an "Engage buy can run to eight or nine networks."

"Through test and control anonymized ad exposure analysis, Engage has proven out lift metrics using transactional data, foot traffic rates and brand surveys," Silvestri added.

The other organizations cited in the BIA/K report are AudienceXpress, Discovery, FreeWheel, Sinclair Broadcast Group, TiVo and Tremor Video.

"As marketers and agencies want more cross-platform campaign planning, activation and evaluation, these tech stacks and business processes must work better together," said Rick Ducey, managing director, BIA/Kelsey and a principal author of the report. "Capital investment, innovation and change is coming to the local TV marketplace," he added citing the perceived values of data-driven audience targeting and advanced TV solutions.

Ducey also pointed out that "advanced TV" has moved beyond its earlier focus on "interactive TV applications" and "addressably-delivered" ads, in which a commercial was delivered to a pre-designated, targeted household. He characterized advanced TV as now comprising "data-enhanced audience targeting via addressable, contextual audience networks, OTT, connected TV and programmatic TV platforms."

The BIA/K report cites "new forms of automation and efficiency" as the key components of Advanced TV, including include platforms, workflow and data.

Ad forecaster BIA/Kelsey predicts that local media revenue will grow 1.6% to $139.3 billion by 2015, fueled by strong growth in the online/digital segment.

In its new U.S. Local Media Forecast 2015, BIA/Kelsey estimates that online/digital will account for about 25.2% of total local media revenue in 2015, rising 13.1% from $31 billion this year to $35 million in 2015. According to BIA/Kelsey, mobile local and social local categories will drive growth in the online/digital segment, with mobile up 53% to $6.6 billion from $4.3 billion in 2014; local social media revenue up 44% to $3.6 billion from $2.5 billion in 2014; and local search revenue up 1.4% to $7.2 billion in 2015;. Rounding out the sector, local display revenues will grow from $4.3 billion in 2014 to $4.9 billion in 2015; and local online video revenues will grow from $2.3 billion in 2014 to $3.0 billion in 2015.

"We expect the pace of growth in the overall local advertising marketplace to moderate through 2019, resulting in a three percent compound annual growth rate," said Mark Fratrik, chief economist, BIA/Kelsey in a statement. "Growth in online/digital advertising revenues will remain strong, with a 12.2 percent CAGR through 2019, compared with essentially flat revenues for traditional advertising (-0.5 percent CAGR) during the same period."