Advertising

After bouncing back in 2022, ad spend is expected to slow in 2023

Growth in ad-supported streaming and political spend will offset sluggish growth in other areas, according to a new forecast from Magna.
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Advertising spend came roaring back this year, but brace yourself: another slowdown is on the horizon.

The overall US advertising market, which grew 11% in the first half of 2022 to $151 billion, is expected to see a slowdown in the second half and into 2023, according to a new forecast from Magna, which tracks media investments.

  • Overall, non-cyclical ad spend (i.e., all the ad spend not related to elections or programming like the World Cup) will slow down to around 6.6% growth in the second half of the year.
  • In 2023, Magna expects total ad revenue to grow 4.8%, down one percentage point from the firm’s prior forecast.

The slowdown will be driven primarily by a pullback in advertising spend in verticals facing economic headwinds, like consumer packaged goods, restaurants, retail, and financial services like mortgage lenders.

Social woes: The fallout from Apple’s iOS changes has already put pressure on social advertising growth. By the end of the first half, social advertising only grew by 3%, and Magna expects it will end the year with only 4% growth overall. Magna expects slightly more growth—6.4%—in 2023.

Chin up: Ad revenues for the entirety of 2022 are expected to reach $323 billion this year, an increase of $29 billion from 2021, as ad formats like out-of-home, search, and digital audio see double-digit growth.

  • Other bright spots include cinema (which grew by an enormous 430% in the first half of 2022 due to a theatrical comeback) and ad-supported streaming, which is expected to grow by 22% by year’s end.

🇺🇲 Political advertising is also set to boost ad revenues in the second half of the year, with Magna expecting political ad spend to generate $7.3 billion in incremental ad revenue.—KS

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