U.S. Ad Sales Expected To Reach New High In 2017
U.S. net advertising revenue is expected to grow 3.6 percent this year to reach $185 billion, reports marketing research firm MAGNA. While a slower growth rate than 2016’s exceptionally strong performance of 5.9 percent, 2017’s net revenue level is an all-time high.
Breaking down 2017 quarter by quarter, MAGNA reports that ad sales grew by 4.2 percent in the second quarter, accelerating from a modest first quarter (3.2 percent), and it expects third and fourth quarters to grow by approximately 3.5 percent year over year.
Last year, the advertising industry benefited from the Olympics and the U.S. elections. Looking ahead to 2018, MAGNA expects the return of mid-term elections, the Winter Olympics and the World Cup to accelerate ad growth to 4.8 percent despite an expected slowdown in underlying spending.
The digital ad segment continues to be strong, turning in sales growth of 17 percent in the first half of 2017, not far behind the 20-percent growth it recorded in 2016. MAGNA forecasts that for the full year 2017, digital formats will generate $84 billion in advertising revenues, up 16 percent, while offline media sales—linear TV, print, radio, out-of-home—will decline by five percent to $101 billion.
Within digital ad sales, video and social remain the fastest-growing formats. Social media ad sales grew 39 percent in the first half. Within social media, video ad format sales will more than double this year, reaching $4.8 billion, or roughly 22 percent of the total social media ad market ($22 billion). However, mobile is set to take the lead. Advertising sales generated through mobile devices represented 50 percent of total digital ad sales in 2016; they will grow to 58 percent in 2017.
For the full report on MAGNA’s findings, click here.
While promotional products are not included in MAGNA’s study, PPAI's Market Outlook Report for second quarter 2017 found that industry sales grew 2.1 percent for the year-ending second quarter. The Market Outlook Report and further research from PPAI on the state of the promotional products industry can be found here.