From 2024's $400 Billion Plateau To 2025's Uncertainty: M&W's New Advertising Forecast + P&G, Unilever and Nestle Capital Markets Days Reviewed, SMBs and CTV, Social Media Bans and More
Madison and Wall: Saturday Summary for December 7, 2024
Each week on the M&W Podcast, we discuss Madison & Wall’s latest research and walk listeners through how the advertising business really works. Episode 13 of the Madison & Wall M&W Podcast is now available on Spotify, Apple, or wherever you get your podcasts.
Weekly Work
On Friday we published our newest advertising industry data set (covering quarterly data for dozens of media types from 2017 to 2028) and forecast for the United States. We revised figures for the most recently completed quarter during which we think that the industry grew by 9.6% (excluding political advertising) and the current quarter which we now forecast 7.0% growth (ex-political). We also revised our 2025 forecast lower to 4.5% growth vs. 5.3% previously (both excluding political) as we have incorporated more negative assumptions into 2025 than we did previously.
On Thursday we published an extensive summary of many hours of investor presentations from Nestle, P&G and Unilever held during November. As part of a broader update on strategic plans for these businesses, each company provided a significant volume of commentary on important trends related to their marketing activities. As we reviewed it in our note in detail, topics raised included the role of AI in marketing, the growing importance of first-party data, the ongoing shift of spending into digital advertising in general and social platforms and retail media in particular, the ongoing focus on efficiencies and the role of reach.
Earlier in the week we published a reaction to Roku’s 2025 predictions specifically focused on the opportunity and challenges associated with broadening the appeal of CTV to include smaller advertisers than those who normally buy television advertising.
And at the start of the week we wrote about several important news items from the latter part of November, including the new investigation from Texas’ attorney-general “into possible conspiracy by advertising companies to boycott certain social media platforms”, Australia’s social media ban for under-16s and Canada’s new lawsuit against Google for “anti-competitive conduct in online advertising technology services.” The Texas investigation alongside other governmental efforts will inevitably lead to a greater concentration of spend with the biggest social media platforms outside of X, the Australia action probably won’t have any meaningful monetary impact on anyone and the Canadian news probably won’t lead to anything that won’t already happen because of antitrust lawsuits elsewhere.
Additional Context
Looking at our forecast for 2025 and beyond, we expanded with details on many of the issues that should impact the overall advertising market, and different media disproportionately. Some of these issues could be positive for advertising such as:
Deregulation of various activities within certain industries
Lower interest rates
And higher inflation
We also considered factors that should be negative for advertising including
Restrictions on advertising spending from specific industries (such as the pharmaceutical sector)
Reduced M&A restrictions
Higher tariffs
Deportations of significant numbers of individuals
Overall, the net-net of these factors is an incrementally negative, although still positive outlook for advertising in the United States going into 2025 relative to 2024.
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