Giant media buyer GroupM expects U.S. TV ad spending to fall 5.1% to $62.3 billion in 2024, excluding political ad spending, following a 5.2% decline in 2023.
Traditional TV spending is seen dropping 10.7 to $45.7 billion, while spending on connected TV advertising climbs 14.8% to $16.6 billion in 2024, getting a 26.6% share of TV ad dollars.
CTV is gaining while traditional TV remains under pressure from cord-cutting and consumers shifting to streaming.
In its forecast a year ago, GroupM predicted that pay TV households would fall below 50% in the U.S. by 2025. Now GroupM said that will happen before the end of 2024.
Political spending is expected to top $15.9 million in the U.S. during a presidential election year.
Looking ahead to 2028, GroupM says that traditional TV will continue to slide. Total TV — traditional TV plus CTV — will be down 2.7% to $57.6 billion. Traditional TV will drop to $36 billion or 62.5% of total TV advertising, while CTV will climb 9.2% to $21.6 billion for a 37.5% share.
One of the biggest areas of growth in the U.S. is retail media, which GroupM said will overtake traditional and CTV combined. In 2024, GroupM estimates, retail media will grow by 11% to $42.5 billion.
“Growth in 2024 and subsequent years will decelerate as retailers likely add some net-new nonendemic advertisers to their rosters, and some share shift takes place as smaller players challenge Amazon’s current dominance,” GroupM said.
GroupM puts 2028 retail media revenue at $59.7 billion.
In its overall forecast, GroupM notes that the U.S. has surprised many this year with its resilience and is expected to post a 2.1% increase in real GDP in 2023 (or roughly 5% in nominal terms), according to the International Monetary Fubnd.
GroupM sees U.S advertising growing 5.7% in 2024, excluding the skewing effects of U.S. political advertising.
This is a slight upgrade from GroupM’s June forecast of 5.1% when it reiterated its belief that the U.S. would avoid a recession in 2023.
“Heading into 2024, we expect a deceleration to 4.1% growth and ongoing mid-single-digit growth through 2028, roughly in line with, or a little above, nominal GDP growth,” GroupM said.
The U.S. is unlikely to see a repeat of the 2015-19 trend of growth well above and beyond GDP, primarily due to progress made in the transition to digital advertising formats, GroupM said.
“We expect digital to represent 70.3% of total ad revenue in 2024, reducing the capacity for double-digit growth,” the media buyer said.
Globally, GroupM estimates that ad spending growth will decelerate in 2024 to 5.3% from a gain of 5.8% to $889 billion in 2023.
Adjusting for inflation, the gain represents negative real growth.
GroupM expects global advertising will return to positive levels of real growth in 2025, when our nominal growth rate will hit 5.6% and the IMF’s global inflation expectations will fall to 4.6%.
Growth is expected to remain at mid-single digits through 2028, with faster-growing emerging markets such as India, Mexico, the Philippines, Poland and South Africa offsetting slower growth from larger established markets such as Japan and the U.K.
By 2028, GroupM sees global ad revenue reaching $1.2 trillion.
At that point, digital will garner 75.5% of ad spending, up from 59.4% in 2023.
