Due to “dampened” consumer confidence and “stagnating” sales for TV and radio broadcasters, the U.S. ad market is expected to grow at a slower pace in 2025 than previously estimated. That is according to a revised annual forecast from Magna, the ad-focused media intelligence unit that is part of IPG.
The updated forecast projects the ad market will grow 4.3% in 2025 — down from the 4.9% Magna initially projected in December. Now, the revised estimate is for the U.S. ad market to bring in $397 billion this year, compared to $380 in 2024.
Magna’s downgrade is based on several factors, including the potential for trade wars stemming from President Donald Trump’s tariffs. That risk is leading some marketers to slash their ad budgets for industries that may be harder hit than others, including the auto industry and consumer packaged goods.
The firm’s report also said traditional media companies, like TV channels, publishers and radio, are more vulnerable to market downturns than other ad-supported industries. Magna estimated non-cyclical ad sales for traditional media will drop 1% this year to $103 billion. That estimate includes a 2% drop for both audio and publishing ad sales this year, to $16 billion and $15 billion, respectively. And it is worth mentioning traditional media providers are not benefiting from election-related ads this year.
“Confidence plays a crucial role in marketing and advertising investment decisions. The current—hopefully temporary—dip in confidence has already dampened the dynamics of the ad market, prompting U.S. to revise our growth forecast for 2025,” Vincent Letang, Magna’s EVP of global market intelligence, said in a statement. “While total ad spend is still expected to grow in the mid-single digits, digital media ad sales will continue to experience high-single-digit growth. In contrast, most traditional media channels may face stagnating ad revenues this year.”
Interestingly, the report found 75% of all streaming hours are spent on ad-supported services. That is up from 58% a year ago, and indicates the market for ad-supported services like Tubi and ad-supported tiers for Netflix and Paramount+, among other streamers, will remain popular as the 2020s continue. The rise of ad-supported streaming, which is projected by Magna to have a 14% increase in ad spending this year, will help offset a 7% decline for traditional TV ad sales.
And while traditional media may be in for a tougher-than-anticipated year, digital media companies are expected to have another big year. Magna projected U.S. ad sales for “digital pure players” like Meta, Amazon, and Alphabet, Google’s parent company, will increase 9.6% year-over-year to $293 billion.
