Magna Global’s newest advertising forecast predicts digital advertising revenues to slow by several percentage points compared to years past.
IPG Mediabrand’s intelligence arm, predicts that digital revenues will grow by only 14% to reach US$304 billion, which is markedly lower than the 18% – 20% annual growth witnessed in the four years prior.
In the U.SS total advertising sales is expected to reach US$220 billion, and digital ad sales are expected to reach 57% of that number, around US$126 billion.
“I think we’ve reached a tipping point with the sheer scale of digital advertising,” Vincent Létang, EVP of Global Market Intelligence at Magna, said to AdWeek.
He added that the slowdown, which Magna and other firms have been anticipating for years, appeared to happen rather suddenly.
“Overall, we consider that the slowdown we were predicting is happening. Nothing can grow for 20% forever,” he explained.
Outside the U.S., he said TV ad revenues will remain strong as the demand is still there.
Nonetheless, the firm does believe that in 2020, the overall advertising growth will gather pace due to major events like the Summer Olympics and the U.S. presidential election cycle.
Advertising growth could hit 5.8% amounting to US$233 billion and the increased revenue of US$6.2 billion in cumulative revenue will certainly compensate for any shortfall.
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