Ad Economy Consensus Forecast Drops

The U.S. ad economy is now projected to expand only 11.3% this year, according to MediaPost's consensus estimates based on the compilation of data issued by the Big 4 agency holding company -- Dentsu, GroupM, Magna and Zenith -- forecasting units. 

The revision is based on a year-end update released by IPG Mediabrands' Magna unit on Sunday, and represents a half a percentage point downgrade from September, when Magna's last update set the U.S. consensus for 11.8% growth this year.

MediaPost's consensus forecast tracking is based on simple averaging for total U.S. ad growth estimates issued by each of the holding company units throughout the year, and while they utilize different bases and factors in their estimates, the goal is to provide a broader consensus view of U.S. and global ad spending trends over time.

In it's year-end estimates, which were released on the eve of Monday morning's annual UBS media week conference when WPP's GroupM and Publicis' Zenith unit also are expected to release their revised global ad spending outlooks, Magna revised its own U.S. ad forecasts down to 8.0% for 2022 from the 9.8% expansion it was forecasting in its last update in September.

Magna originally benchmarked 2022 U.S. ad growth at 12.0% when it released its initial forecast in December 2021 at last year's UBS conference, and it has trended down periodically ever since.

Magna also took down its 2023 U.S. ad growth outlook to 3.7% from 4.8% in September, and 10.2% when it benchmarked in in June.

While the U.S. ad market growth has been gradually decelerating through the year, Magna analysts interestingly forecast it will begin to "reaccelerate" through 2023, despite some pundits forecasts for a macroeconomic slowdown, as well as comparisons with important cyclical ad spending events in 2022, including the midterm elections, Olympics and World Cup.

While GroupM and Zenith are not expected to release revisions on total U.S. ad growth explicitly in their presentations on Monday, they likely will discuss it anecdotally as part of their global ad updates.