In an updated forecast, media agency Magna forecasts that U.S video advertising revenue will increase 8% to $88.6 billion in 2022, upfront its previous forecast of a 7.8% gain. 

Magna is expecting some economic slowdown in the last three quarters of 2022, but saw a stronger than expected performance in Q1.

National broadcast and cable revenue is expected to be down 4.1% to $38.6 billion, but that’s better than the 5.3% drop in the earlier forecast. 

Also: GroupM Sees U.S. Traditional TV Ad Revenue Dipping 0.4% in 2022

National ad-supported video on demand, over-the-top and connected TV ad revenue is expected to be up 21.8% to $7 billion, less than the 27.2% previously forecast. 

“Digital video will be the most dynamic format in 2022, reflecting the continued shift of viewing away from linear TV and towards on-demand, addressable platforms (mobile devices and, increasingly, connected TV),” Magna said. 

Also: Zenith Sees U.S. TV Spending Up 3.2% With Political Ads Boosting Spot

Local video is seen rising 19.4% to $23.4 billion, a stronger increase than the 15.8% gain seen earlier. Local will benefit from $6.7 billion in political ad revenue, up 51% from the comparable 2018 midterms. 

“Local broadcast stations local addressable ad formats (local cable, CTV) will get two thirds of the political bonanza (around $4 billion) while the third will mostly benefit pure-play digital ad formats,” Magna said.

Overall what the agency calls long-form video will be up 5.2% to $59.1 billion, with short form video up 19.3% to $19.5 billion.

“Entertainment and travel will be among the main drivers for advertising spending growth,” Magna said, noting that sports betting is becoming a major category. Sports betting has benefited mostly local media so far, but national will be increasing is share as betting is legalized in more states, including New York this year with California and Texas possible in 2023.

For 2023, Magna sees video ad revenues dropping 1.7% in a non-election, non-Olympic year. National broadcast and cable are expected to be down 5.1% while national AVOD, OTT and CTV are expected to jump 30%. 

Local video ad revenue are expected to drop 20% .

Across all media, Magna forecast that U.S. advertising revenue will be up 11.1% to a record $426 billion, including political. That represents 40% of the global advertising market.

Global ad revenues are predicted to grow 9.2%  to nearly $828 billion. 

“Television continues to suffer from erosion of linear reach and viewing: down 5% to 15% per year among adults under 50 and 5% per year for the entire population,” Magna said. “This is however offset by three drivers: (1) growing AVOD revenues (up 10% to 15% this year), (2) double-digit inflation in cost-per-thousand pricing so far this year, and (3) incremental ad spend around cyclical events (mid-terms and Winter Olympics in the US, FIFA World Cup). Without cyclical dollars, television ad sales would grow by 1.6% this year, instead of 3.9%.”  ■

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%. ■

National TV ad revenue, thanks in part to the Tokyo Olympics, are expected to grow 4.6% in 2021, rebounding from a recession caused by COVID-19 that was more mild on the media than predicted, according to a new forecast from media buyer Magna Global.

Excluding the Olympics’ $800 million in incremental ad sales, national TV is expected to rise 3.3% in 2021.

With the Presidential elections in the rear view mirror, local TV revenue will be 20.4% lower (or up 3.7% if you exclude the record political spending in 2020). 

Magna said that for 2020, national TV will finish down 11.1%, while local will close down 3.4%, or down 20.6% not counting political. 

Magna estimates that the election generated $6.1 billion in net incremental advertising sales. Digital haul from the election was $1.5 billion, three times 2018, with $700 million spent on digital video. Local television took in about $3.6 billions political ads, up 30% and national television grew 32% to $300 million ads.

Traditional--or linear advertising is expected to be down 2.8% in 2021 after a 15.8% plunge in 2020.

The weakness in linear was offset by growth--slower but still significant--in digital media. Digital growth is expected to be 8% in 2021, down from 10% in 2020 and 16.7% in 2019. 

Mobile will be the biggest gainer, up 12% in 2021, followed by online video, up 11.8%. Online video revenue jumped 19.4% in 2020 as the pandemic drew consumer to streaming.

Overall, U.S. advertising is expected to grow 4.1% in 2021 to a record $230 billion, compared to a 1.3% decline in 2020, including cyclical events.

Since its last report in June, Magna has increased the 2021 growth rate for North America to 4.2% from 4%.

Globally, Magna sees advertising growing 7.6% including cyclical events (Olympics), and 8.1% including cyclical events. That would follow a 4.2% drop including cyclical events in 2020 and a 5.1% decline excluding them.

“Back in the spring, Magna  predicted that digital media organic growth factors would drive digital to grow despite the COVID recession (+1% globally, +3% in the US),” said Vincent Letang, executive VP, global market intelligence at Magna. 

“It turns out digital media resilience was even stronger than expected (+8% globally, +10% in the US) and possibly because of the changes brought by COVID,” he said.

The pandemic triggered a tremendous acceleration in both supply (digital media usage and audiences, eCommerce) and demand, with small businesses embracing digital media to keep their business alive during lockdowns, big brands pivoting towards lower-funnel marketing channels as they typically do in recession times. 

“Magna believes the return of consumer mobility, major events and economic recovery will prompt most industry verticals to grow their linear advertising budgets in 2021, but the long-term trajectory has shifted even further towards a digital-centric marketing environment for years to come,” Letang said.

Personalized ads can forge stronger connections with consumers and ultimately boost purchase intent, a new study from media buyer Magna and IPG Media Lab.

The study, Pursuit of Relevance: All About Ad Personalization, found that most forms of ad personalization had value, but moving some metrics took more work. 

Personalizing ads based on major life events struck an emotional chord with people, leaving them 16% more interested in hearing more from the brand and 12% more likely to purchase the brand, compared to the same video ad without a personalized message.

Testing was conducted among brands’ demographic target and with high-value audiences, based on people-based ID created by Kinesso. Six data sources were tested for personalization: demos, past purchases, location, life events, search terms and persona-based messages (only used on the high-value audiences).

“This is an important study that reinforces our belief that personalized messaging, when coupled with precision targeting is a key to driving the results that brands demand today of their advertising,” said Brendan Gaul, global chief content officer, head of UM Studios, an IPG media agency. “It also uncovers the importance of maintaining best practices and creative excellence in the development of the work. A good ad that is personalized works very hard. A bad ad that is personalized is still a bad ad.”

The study was conducted with 6,600 participants and looked at three advertiser categories, auto, retail and finance. 

“Relevance is a critical part of brand marketing strategy because people today are inundated with content on a daily basis and it can be overwhelming,” said Kara Manatt, senior VP, group director, intelligence solutions at Magna Global. “Personalized messaging can not only help create more relevant ads, but also help amplify brand stories, forging stronger, more solid personal connections.”

The study also found that personalization doesn’t guarantee branding. Performance of personalized ads is amplified when branding is incorporated into the messaging. With branding in the message, personalized ads are 8% more memorable than standards ads. Creative best practices still apply, so the process of planning for personalization shouldn’t distract from the need to have strong branding, according to the study.

Advertisers should couple personalization with precision targeting, the report said. Using people-based IDs for targeting HVAs is effective, but these audiences are often critical of mass market messaging. In response to personalized ads, however, HVAs are much more open, with 5% saying its something they’re open to right now.

Brands should also consider crafting persona-based messaging for even greater impact. The report found a 20% stronger response to ads personalized based on brand preference compared to 8% using standard personalization.

In the throes of a pandemic, national television advertising revenue is expected to drop 13.2% in 2020 and recover by 4.3% in 2021 according to a new forecast from major media buyer Magna Global.

Even with heavy political spending in a presidential year, local TV is expected to be down 2.4% for 2020. After the election, a 14.5% drop in 2021 is expected. Core revenue for local TV is seen edging up 0.1% in 2021.

Digital advertising continues to grow, even with COVID-19. Total digital is forecast to grow 2.8% in 2020--way downfrom the 16.8% growth seen in 2019. Magna sees total digital up 7.3% in 2021.

Online video is poised to increase 10.8% in 2020 and 7.8% in 2021.

“In contrast with most linear media, digital advertising formats benefit from increased consumption, and will remain more resilient to the drop in advertisers demand. MAGNA anticipates ad spend on digital formats (search, video, social, banners, digital audio) to stabilize in the summer and recover in the second half,” Magna said in its report.

Total U.S. ad spending is expected to shrink 4.3% in 2020 and grow 4% in 2021.

“Many industries face significant economic headwinds and have been forced to cut considerable amounts of spend as a result. The travel, entertainment, automotive and restaurant industries will be among the most affected, and Magna expects each of these industries to reduce linear advertising spend by 25% or more on a full year basis,’ the agency said.

On the other hand categories like pharmaceuticals and food & beverage industries aren’t as affected and their ad spending may be reduced only by single digits. Some tech companies in hardware, software and e-commerce might increase spending.

“Magna expects advertising spending to start to stabilize in 3Q (-5% vs 3Q19) and recover in 4Q (flat vs 4Q19) as some businesses that started reopening in May-June will need to rebuild market shares, traffic and sales in the coming months,” the agency said.

Global ad revenue will drop 7.2% in 2020, according to Magna’s forecast, but rise 6.1% in 2021.

“Beyond the short-term V-shaped recession/recovery impact on the economy and the advertising market, the COVID crisis will have global and long-term effects on society, business models, consumption habits, mobility and media usage, all factors pointing to a more subdued economic growth and advertising spend than previously forecast for the 2022-2024 period,” said Vincent Letang, Magna’s executive VP, global market intelligence. 

“Magna thus reduces its global advertising growth forecast for these three years, from 4.5% per year to 3.5% per year. The global ad market will reach $647 billion by 2021 compared to $745 billion in our previous long-term scenario (a 14% decrease),” he said.

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New York -- Presenting an overview of changing viewer trends in the multichannel universe, Magna Global's Brian Hughes said certain trends in over-the-top viewing are encouraging for providers that rely on ads for their businesses, competing against ad-free video behemoths such as Netflix and Amazon Video. 

"I think a lot of people, even young people, accept the idea that nothing is free,” Hughes, who is senior vice president, Audience Intelligence & Strategy, at Magna, told questioner Bruce Benson of FTI Consulting at the On Demand conference today. Most of Hulu's subscribers, it would appear, accept ads in order to pay a lower monthly fee for their subscriptions, Hughes noted. CBS All Access also has a pricing structure that offers subscribers a lower-cost version that includes ads. Hughes said Magna is keeping a close eye on both services, noting that the CBS service's pushing back the launch of the new Star Trek: Discovery series was "a bummer."

Viewing trend charts Hughes displayed showed clear trends toward on-demand viewing growing at the expense of live TV. Even live events and sports, "the bastion of linear TV in this changing world," are being affected by viewers who expect to watch what they want when they want to. The live audience for the MTV Video Music Awards, he said, declined by 51% from 2014 to 2016 among persons ages 12-14, he said, but streamed views of the VMAs in that period have surged. For MTV, the live-stream views on PC and mobile are up 461%; Facebook streams of the event rose 704% and Twitter views rose 190%, according to Magna charts he presented, sourced from Nielsen and MTV.

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The VMAs draw a younger-skewing audience, Hughes noted. Similar trends are in play for the Olympic Games, though, too. Live viewing was down on NBC for the recent Rio games versus London four years ago. But live streaming of the Rio games hit 2.7 million minutes, surpassing the 2.6 billion minutes drawn by the prior record holder, the 2014 FIFA World Cup.  

Hughes showed Cisco research that indicated by 2020 video will account for 82% of consumer internet traffic globally -- and noted an interesting aspect is that 26% of that traffic will be delivered to TV sets.

Other statistical nuggets:

• By 2020, about 43% of time spent watching video will come via streaming (as opposed to live TV) for adults ages 18-34, up from about one-third of the time in 2014. 
• In early 2016, subscription VOD services surpassed digital video recording playback as the preferred method of on-demand consumption, vs. a 49%-41% split in favor of the DVR in 2014, per Magna estimates.
• By 2020, households termed as "cord cutters" should reach around 9 million, from about 2 million in 2014 -- but "cord nevers" will remain an even bigger group, rising to about 26 million households from about 19 million in 2014.  

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