Advertising firm Magna, part of media giant Interpublic, has trimmed its 2025 forecast due to recent declines in consumer confidence.
The new outlook calls for growth of 4.3%, down from a prior expectation of 4.9%. Excluding cyclical events like the election and the Olympics, Magna is now looking for 6.7% growth, down from 7.3%. Digital ads will remain strong, posting high-single-digit gains, while legacy categories like linear TV are expected to stagnate.
In part, the adjustment also reflects difficult comparisons with 2025. U.S. ad sales hit $380 billion last year, with the growth rate of 12.4% the highest of any year in the past two-and-a-half decades except for the 2021 rebound from Covid.
Even after the reduction, Magna called its updated numbers “still solid by historical standards.”
The firm issues a report at the start of each year, laying out key targets, and then provides periodic updates and tweaks to the numbers.
Vincent Létang, EVP, Global Market Intelligence at Magna and co-author of the updated report, said “most economic fundamentals” are still healthy. “However, 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 us to revise our growth forecast.”
During the first quarter of the year, which will come to an end on Monday, consumers have been confronted by a flurry of announcements about tariffs, which in turn have rattled financial markets. Amid the stock market gyrations and stubbornly elevated inflation levels, the Conference Board reported Tuesday that its consumer confidence index fell 7.2 points in March to 92.9. That marks fourth consecutive months of decline and the lowest figure since January 2021.
Tech giants like Google, Meta, Amazon and Spotify as a group will post advertising gains of 9.6%, reaching $293 billion, Magna said in its revised report. Traditional media companies, whose portfolios include television, premium long-form streaming, audio, publishing, out-of-home and cinema advertising, “may face challenges in this uncertain environment,” the firm cautions. Traditional companies will collectively register a drop of 1% this year, settling at $103 billion in revenue, Magna projects.
Cross-platform national TV sales (linear plus streaming) are expected to remain stable around $46 billion, as continued growth in ad-supported streaming (+14%), helps offset a decline in linear viewing and ad sales (-7%).
