The topline: As media companies think about achieving 2024 advertising goals, consider investing resources in these high-potential spaces and big-spending advertisers.
This year, I’m optimistic about advertising opportunities for nimble media companies despite likely shifts in market conditions. Although budgets tightened considerably in 2023, recovery signs point to an acceleration in ad spend. As media companies think about achieving 2024 advertising goals, consider investing resources in high-potential spaces like political advertising, pockets of opportunity in local markets, and key market segments or advertisers.
Economic conditions can shift quickly, so close monitoring of market signals allows smart firms to pivot toward expanding revenue by adjusting strategy. Here are some trends that media companies should not ignore along with insights to help capitalize on the potential increase in ad revenue associated with each.
The digital ad market is starting to recover and advertisers will be spending
We entered 2023 with rapidly rising interest rates and inflation, which seemed to point to a terrible recession. Advertisers began tightening budgets back in September 2022 anticipating tough times ahead. That defensive posture continued until late 2023 when the purse strings finally began to loosen.
In December, MediaRadar observed a promising 10% year-over-year increase in ad sales, but total advertisers still lagged by 13% YoY. This was likely due to both precautionary pullbacks and mounting bankruptcies. Last year saw bankruptcy filings surge by over 18%, its highest rate since 2009.
Despite these and other economic and marketplace challenges, we expect things to continue to open in 2024. However, the rebound will not be even, so sales leaders must monitor segments closely. Categories like Electronics, Financial Services, Housewares, Pharma, Sports, and Software stand out as pockets of growth. Given limited resources, ad teams need to invest them wisely.
Political advertising will be up and distributed across the country
The political advertising spend is primed to reach unprecedented heights during the 2024 election cycle, far exceeding the $1b during the 2020 presidential election. With abortion rights, healthcare, and other issues central to voter engagement, both sides appear ready to invest in advertising.
Historically, election advertising was concentrated in swing states. However, current trends point toward more national allocation this cycle. We already see political ads penetrating every state.
Abortion-centered messaging currently comprises 6% of the total Democratic spend. Immediately following the Dobbs verdict (May 2022), ad spend with abortion messaging across political parties jumped to 19% of federal political ads on broadcast TV. This will remain a hot button during the election cycle and we are likely to see ad spend surrounding this topic skyrocket in both national and regional markets.
For media firms, partisan advertising represents an unparalleled revenue opportunity for firms with a solid strategy.
Local advertising suffered in 2023, but will recover in 2024
Last year was especially challenging for regional media. Local ad spend was down 11% YoY dropping to just 16% of all media spend in 2023. But 2024 should see recovery gain steam in select markets.
For instance, Phoenix looks ripe for rebound thanks to the 2022 CHIPS Act’s $53 billion investment in the manufacturing of semiconductors in the U.S. As infrastructure starts to develop, there will be advertising in the local market to support education, employment, and construction among others.
This is just one key area in which we expect an uptick in local ad spend. It is important for media companies to understand how local advertising will impact overall ad spend in 2024. Government spending, newsworthy events, and businesses expanding can all impact ad spend in the local markets. Media companies should keep up with trends in the local markets. It may be necessary to adjust the narrative and offerings to key advertisers as budgets shift.
Apple is making big bets on vision pro
While a $3,500 virtual reality headset may seem an unlikely hit, the iPhone once faced skepticism around its $1,000 price. Now, Apple is betting big on breaking new ground again with their upcoming “Vision Pro” launch.
This marks Apple’s biggest product release since the Apple Watch in 2015. Historically, Apple spends over $35 million in advertising for key launches across their product lines each year. We expect Vision Pro to earn substantial marketing backing given the effort Apple has poured into this brand-new product push into VR.
The official unveiling comes on February 2nd, 2024. The Vision Pro represents an opportunity to pitch Apple on driving customer excitement and awareness in a new tech frontier.
Media companies should be prepared with compelling pitches for Apple. They are one of many brands launching products this year. It is vital to know when RFPs are being issued and to have strong relationships with key media buying teams.
Opportunities in a challenging digital advertising market
In 2024, the advertising market, and media industry as a whole, will face many challenges. However, there is a real opportunity for savvy media companies to capitalize, while cautious competitors will stall. In this article, I shared a few of my advertising predictions for the year ahead.