There are plenty of highlights for traditional ad sellers in 2024, from the Paris Olympics to the presidential election. But major media agency Magna Global sees the WGA strike and other factors dragging down revenue over the next year.
In an update to its 2023 forecast issued today, Magna raised its overall growth outlook and highlighted the recovery of digital buying. But the traditional sector is increasingly troubled, the report noted.
While overall ad spending re-accelerated in the second quarter, the report said, digital media vendors in areas like search, social and video were the main beneficiaries, posting an 8.7% increase in the quarter. Traditional media companies reported a decline of 4.1%.
“The ad revenues of most traditional media owners will continue to stagnate or decline despite the continued growth of their digital ad sales,” Magna said of 2024. National TV, factoring out the election and other one-time boosts, will be down 3% and local TV will slip 5%. But those cyclical boosts will be significant. Local TV ad revenue is expected to grow by 28% compared to 2023, thanks to an incremental $5.7 billion generated by political demand along with spot inflation.
And then there is Hollywood’s labor mess.
“The ongoing writers’ strike may lead to a lack of fresh attractive content in the first half of 2024 and thus potentially a further acceleration in long-term viewing declines,” the report said. Lower ratings will not be balanced by price increases, with the agency predicting the lowest increase in rates in 20 years. The result will be a nearly 7% drop in linear ad sales next year, offset by an 11% upswing in AVOD along with the Paris Olympics. Magna pegs the total cross-platform national TV ad revenues in 2024 at $46.4 billion, down a shade less than 1% from 2023 levels.