The US advertising market is set for significant growth in the final quarter of 2023, but not all audio will reap the benefits. According to a recent forecast model from Madison and Wall’s Brian Wieser, the overall market is predicted to accelerate with 6% growth in the third quarter and a notable 8% increase in the fourth quarter.
This optimistic outlook can be attributed to a combination of a relatively stable economy and the low base effect from Q4 2022, which was essentially flat.
Both traditional and digital audio were accounted for in the forecast, with both growth rates nearing zero percent. This is a marked improvement for traditional audio, which has seen ad growth through the year. Q1 started at around a 4% loss rate, which has improved around 1% per quarter to finish the year hovering around a 1% loss for Q4. This could even lead to an overall gain, considering political ads are subtracted from these predictions.
Meanwhile, the outlook for digital audio suggests a post-September tumble. Ad growth rates have been hovering steady around 4% for the first three quarters of 2023, but Wieser’s forecast shows digital falling to only 1% growth. This reflects a tougher market for digital audio, which has been struggling to find its footing as of late with mass layoffs and cutbacks at many major operators, especially in the podcast divisions.
In terms of individual media sectors, retail or commerce media is expected to outperform others, with a growth of 17.2% in Q3 and 19.0% in Q4. National connected TV is also expected to grow robustly, at a rate of 9.3% in Q3 and 12.6% in Q4.
Traditional TV is predicted to continue its decline, with a decrease of 6.5% in Q3 and 4.6% in Q4. Social media platforms are poised for growth, with a projected increase of around 14% in the third quarter and about 10% in the fourth quarter.
“While the 4Q23 number sounds strong, it’s important to recall that 4Q22 was essentially flat, at a nadir of marketer sentiment and the absence of pandemic-driven boom-era marketers,” wrote Wieser. “The combination of a relatively-healthy economy and easy comparables means that the fourth quarter should be the best quarter of the year.”
