Today, Magna released its spring update to its U.S. Ad Forecast report for 2025, and the results focus on what the market looks like during an uncertain time.
Magna found that U.S. ad sales reached $380 billion in 2024, as fourth-quarter earnings were strong across the board. This reflects a more than 12.4% increase (+9.9% excluding cyclical spending). However, Magna, which already expected a down year in 2025, is reducing that forecast even more.
“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,” Vincent Létang, evp, global market intelligence, Magna, and co-author of the report, said 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.”
Here are some of the standout points and key takeaways from the report:
Lack of visibility could slow down the ad market
Magna predicts that the lack of visibility and risk of a trade war may cause marketing and advertising budgets to either freeze or result in cuts in industries that are vulnerable to global trade, supply chain disruptions, and consumer confidence issues. That includes consumer packaged goods companies, in food, drinks, and personal care, as well as quick-service restaurants and the automotive industry.
These industries account for a sizeable share of ad spend in the U.S., but there are still large, growing industry verticals that are not particularly sensitive to global costs or economic fluctuations, like pharmaceuticals, retail, tech/telecoms, entertainment, finance, and insurance.
Moreover, endemic and organic growth factors (media innovation, retail media, ad-supported streaming) that drove ad spend faster than the general economic growth in recent years will continue to make advertising formats more effective, efficient, and attractive to brands and encourage advertisers to maintain or develop advertising budgets.
Considering the various business and economic factors, Magna has reduced its 2025 ad market growth forecast from +4.9% in December 2024 to +4.3%. Non-cyclical ad sales will grow by +6.7% (previous forecast +7.3%).
Still, some categories will continue with robust revenues. For instance, digital pure players (DPP) in search, retail media, social media, digital video, and digital audio (such as Google, Meta, Amazon, and Spotify) will see ad revenue grow by +9.6% to $293 billion.
Traditional media owners are the most vulnerable
Magna points out that traditional media owners (TMO) (categories that fall under television, premium long-form streaming, audio media, publishing, out-of-home advertising, and cinema) are more vulnerable when a lack of business visibility leads some marketers to prioritize short-term KPIs and lower-funnel channels.
Because of this, Magna expects TMOs’ non-cyclical ad sales to decline by -1% to $103 billion, while cross-platform TV sales stabilize, with growth in ad-supported streaming (+14%) helping to offset an ongoing decline in linear ad sales (-7%).