Advertising spend is expected to make a recovery in 2024, but legacy media will continue to face challenges, according to a new forecast from S&P Global Ratings.

Despite geopolitical events and economic fears that affected advertising spend in the first half of 2023, the report said advertising began to recover in the second half of the year. While it estimates real global economic growth will continue to lag for two years, advertising jumped 3.7% in 2023. Digital advertising is expected to see particularly strong growth this year; S&P Global estimates it grew 10.5% in 2023. It forecast that digital video, social, and search will make the biggest leaps this year, at 15%, 11%, and 9.5%, respectively.

Legacy media, on the other hand, will not fare as well. S&P Global doesn’t expect the category, which includes linear TV and radio, to see “modest” growth until the second half of 2024. Advertisers are finally walking away from linear TV in particular, the report said; many viewers have already migrated to streaming platforms, and linear TV advertising dropped 10.8% in 2023. Legacy media as a whole dropped 8.5% in 2023, according to the report.

Red, white, and blue
With the 2024 US presidential election on the horizon, political advertisers are expected to stick with linear TV, however, and local TV is expected to attract more political advertising dollars this year compared to in 2020.

“We continue to believe TV is more attractive than other forms of media for political advertisers given its significant reach and ability to target voters in select districts,” the report said.

Another contributor to linear TV ad dollars will be the 2024 Paris Summer Olympics: S&P Global forecast that the event will draw $1.8 billion in national broadcast TV advertising revenue. Broadcast and cable networks that feature sports, especially the NFL, will also see higher ad dollar payoff, while entertainment and lifestyle networks will see weaker demand.

Growth in automotive industry advertising also stands to bolster local TV, S&P Global found. However, it may take several years for local TV advertising to reach pre-pandemic levels.

Cloudy skies ahead
The report cautioned that accurately predicting advertising trends in advance can be difficult because of short lead times, particularly with digital advertising, which now comprises roughly 70% of US advertising. Advertisers have been slow to make advertising commitments amid economic uncertainty.

According to the report, TV advertising was hit particularly hard due to the 2023 Hollywood strikes. While radio ad spend is expected to jump 1.5% in 2024, its lead times have also been reduced to “a few weeks to a month.”

“We expect little visibility into forward advertising trends,” the report said.