Madison and Wall forecast $397 billion in 2024 ad spend

“This impressive performance is attributed not just to a healthy economy but also to ‘easy comparables’ from the previous year,” according to the report authors, who based their observations on the aggregated results of publicly listed digital platforms and media owners. 

“While positive economic conditions generally support advertising growth, the latter half of 2024 is expected to slow down due to higher growth rates in Q3 and Q4 of 2023,” according to the report.

Such developments have caused Madison and Wall’s analysts to revise expectations. They now project that overall U.S. advertising will grow by 7.2%, or 10.5%, including political ads, this year to hit $397 billion.

Madison and Wall’s Brain Wieser told Digiday his overall takeaway was that “the ad market is really healthy,” even if various indicators’ reporting gives the perception that the economy, ergo ad spend, is weak.   

“That doesn’t mean there aren’t individual companies that aren’t struggling,” he told Digiday, pointing to the contrasting fortunes of the industry’s largest platform providers, such as Alphabet, Amazon, and Meta, compared to legacy media owners.  

The report highlights how digital ad platforms grew 16.4% during the second quarter of the year, driven primarily by retail media networks, or “commerce media” as some would term it, which will exceed $50 billion in 2024.

Wieser pointed to the continued increase in ad spend from CPG manufacturers as a particular driver of commerce media, with report authors also alluding to the “significant budget increases from larger manufacturers in recent years” as a historical driver of such growth rates.

The report also points to how digital advertising remains “the most important component of the ad market” with platforms (not including digital extensions of traditional media, such as CTV or digital publishing, digital OOH or digital audio) accounting for 67% of the industry’s ad revenue during the past quarter after growing 16.4% in 2Q24.

Meanwhile, other forms of digital advertising should also exhibit signs of deceleration. The report authors point out that search and social platforms will probably grow at similar rates in the near future, especially as the growing AI investments from Facebook and Google, etc., enhance the performance capabilities of both kinds of media. 

Meanwhile, the fortunes of traditional media owners on the open web compare unfavorably — or “underwhelming,” to use the words of report authors — when compared to Big Tech players. “Growth will generally be limited in years ahead as the sheer range of formats will appeal to many advertisers, but at the same time there will be limits to marketer interest given challenges identifying consumers, concerns around spammy/made-for-advertising content, and concerns around brand safety,” reads the report.   

Speaking with Digiday, Wieser noted that marketers are under increased pressure to demonstrate how their media investments drive a return on ad spend, which means their budget decisions can often contrast with their public declarations of support for media institutions.

“Marketers will talk a lot about how important content is, and yet, their money suggests otherwise,” he told Digiday. “They focus more on performance, much more than they focus on content.”