The U.S. advertising market is looking healthier now than in December, media investment companyMagnasignaled on Thursday, raising its 2024 forecast.

Magnas latest projection is for growth of 9.2 percent to $369 billion, or 6.7 percent excluding cyclical factors. In December, the company had predicted a 2024 gain of 8.4 percent, or 5.9 percent when excluding cyclical events, such as the Paris Olympics and political spending.

Based on Magnas analysis of media companies financials, non-cyclical advertising revenues grew by 9.1 percent in the fourth quarter of 2023, i.e. the strongest quarterly growth in almost two years, bringing full-year 2023 ad market growth to 5.7 percent, the firm explained. Because of an improving macro-economic outlook, the momentum of digital media and streaming, and the impact of cyclical events, Magna anticipates more growth in 2024. Vincent Ltang, executive vp, global market intelligence at Magna and author of the report, also noted as key factors for the higher forecast the improved macro-economic outlook, with GDP growth raised from 1.7 percent to 2.4 percent, as well as the momentum of digital media formats: social media, retail media, and streaming.

Added the expert: We are slightly reducing the forecast for cyclical spending (due to a slowdown in political fund-raising) but, overall, we now expect total media owner ad sales to grow by 9.2 percent this year.

Social media advertising will grow by 14 percent to reach $80 billion while advertising on long-form streaming will expand by 13 percent to reach $10 billion, Magna estimates.

While most industry verticals will grow this year, led by retail (9 percent) and travel (9 percent), the company anticipates stagnating or declining advertising activity for entertainment (-4 percent) and technology (+1 percent).

Advertising around major cyclical events will drive approximately $10 billion of incremental ad sales as the 2024 election cycle will generate $9 billion of additional ad revenue for media owners (+13 percent versus the 2020 cycle), Magna forecast. This will add 2.5 percentage points to the non-cyclical growth.

Digital pure players will capture most of the market growth in 2024, with non-cyclical advertising sales growing by 12 percent to $261 billion, or a 72 percent market share). In comparison, the advertising revenues of traditional media owners will grow by 3.5 percent as the influx of cyclical dollars offsets a 3 percent decline in non-cyclical ad sales, Magna said.

Among the outperformers in 2024, it highlighted premium long-form streaming (CTV, AVOD, FAST), which will expand ad revenue by 12.9 percent, driven by the introduction of advertising on Amazon Prime Video, to reach the $10 billion milestone (22 percent of total national TV). Linear TV networks, however, will see an 8.8 percent drop to $34.2 billion in 2024.

These two categories make up the national TV ad category, which Magna projects will drop 4.7 percent this year.