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.
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.
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%.” ■
Broadcasting & Cable Newsletter
The smarter way to stay on top of broadcasting and cable industry. Sign up below
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.