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PwC US Ad Market Sizes 2020 2024 Sept2020PwC has released its latest annual Global Entertainment & Media Outlook report, a comprehensive study that contains projections for online and offline media advertising markets through 2024.

[Editor’s note: If you’re interested in media trends, the 6th annual edition of our Media Audience Demographics report is for you! The report – available for purchase here – breaks down the audience composition of several online and offline media types by age, income and race/ethnicity.]

Needless to say, marketing has not been immune from the impact of coronavirus. These latest forecasts reflect this. The estimated market sizes across most categories for 2024 are now lower than what PwC predicted for 2023, with the notable exception of video games, digital music streaming, and podcasts.

Here’s a look at some of the highlights for major media markets covered by PwC, ordered in size for 2024, and specific to the US.

Online Advertising

Even with the inevitable disruption of COVID-19, the gap in spending continues to widen between online advertising and TV advertising. Updated estimates from 2019’s online advertising spend puts it at $125.2 billion, some $54.8 billion higher than the spend on television ($70.4 billion). PwC forecasts that this year, online advertising spending will dip slightly to $120.9 billion — making that spend more than $58 billion higher than TV, which is also expected to dip after remaining relatively flat over the past few years.

The latest estimates predict a 4.09% compound annual growth rate (CAGR) from 2019 through to 2024, at which time the online advertising market in the US is expected to reach $153.0 billion. By 2024, the dollar spend on online advertising is forecast to be more than double that of TV advertising spend.

In 2020, mobile is expected to account for 71% of total US online ad revenues, with that share expected to grow to 77% by 2024, when mobile’s value is estimated to reach $117.8 billion. Mobile ad revenues will grow faster than the total online advertising market for the forecast period, with a CAGR of 6.2%.

Within mobile advertising specifically, paid search is expected to account for the largest amount of spend this year ($36.8 billion), followed by display advertising, excluding video ($33.8 billion) and mobile video advertising ($14.7 billion). These rankings are expected to maintain the same order in 2024, and while paid search will see the greatest CAGR (7.2%) from 2019 through 2024, mobile video advertising (6.2%) is expected to have a greater CAGR than other display (5.1%).

Non-mobile internet advertising (termed “wired” by PwC) figures tell a somewhat different story. As a whole, non-mobile internet advertising is expected to decline by 7.1% (-1.47% CAGR) between 2019 and 2024, when the market size will be $35.2 billion. However, the market size in 2024 is only slightly lower than that of 2020’s figure of $35.6 billion.

Within non-mobile, all but two categories are forecasted to decline. The exceptions are classified advertising, which is expected to grow at a CAGR of 3.3% between 2019 and 2024, and video advertising with a compound annual growth rate of 6% over that period. Non-mobile video market size is estimated to be $7 billion, a figure predicted to reach $9.4 billion by 2024.

PwC’s estimates show that by 2022 non-mobile video advertising will have edged out non-mobile display advertising, and by 2024 the gap between the two will be wider as other display falls to $6.5 billion.

TV Advertising

Although Americans are now spending more time with both traditional pay-TV and OTT services than they did a year ago, particularly since the start of COVID-19, PwC estimates that the US TV advertising market will fall to $62.3 billion in 2020. This decline from 2019’s $70.4 billion is likely due to COVID-19 as the TV advertising market is set to see modest gains in the coming years, with its market size reaching $71.6 billion by 2024 – making the CAGR for 2019 to 2024 a mere 0.4%.

As traditional TV advertisers continue to struggle with the shift towards subscription streaming services like Netflix, Amazon Prime and newcomer, Disney+ which offer an ad-free experience, PwC reports that traditional TV operators are investing in their own streaming services, while also putting funds towards addressable TV. At the same time, advertisers are relying on “must-watch” events, in particular, live sports such as the Super Bowl where 30-second spots are at a premium.

The analysis also points out that competition has increased due to renewed interest in advertising video-on-demand (AVOD) models. Whether it be with free platforms like Pluto TV and Tubi or lower-rate subscription tiers offered by Hulu and Peacock, recent research shows that viewers are showing interest in these ad-supported video options.

Despite this, and the fact that more consumers are making online sources their default for viewing, the forecast has online TV advertising accounting for a small share of the total TV advertising spend in the coming years. Spend on online TV advertising in 2020 is expected to be $4.7 billion, with a relatively modest rise to $5.8 billion by 2024 (3.9% CAGR).

Broadcast TV advertising’s overall growth is expected to remain flat – with a CAGR of 0.1%. Cable networks are expected to see a 0.3% CAGR for the period of 2019-2024, while multichannel systems advertising is expected to continue to decline (-1.5% CAGR).

Radio Advertising

The radio advertising market is expected to feel the effects of COVID-19, too, with total ad spend on radio dropping from $17.8 billion in 2019 to an estimated $14.8 billion in 2020. [Note: Radio figures include advertising in Canada, as well.]

Recovery is expected to be quick, however, with ad spend in 2021 up to $17.1 billion and rising to $18.3 billion by 2024. As such, the CAGR from 2019-2024 is expected to be 0.6%.

The largest share of radio spend is still concentrated in traditional broadcasting, and is expected to remain that way through 2024. Spend on traditional radio in 2020 is forecasted to be $12.9 billion, and will rise to $15.5 billion by 2024.

Accounting for a much smaller share of total radio advertising, terrestrial online advertising is expected to see a faster CAGR, of 7.1%. Spend in 2024 is forecast to reach $2.6 billion, up from $1.7 billion in 2020.

Data from Nielsen shows that much like radio, where its reach has remained flat in the first quarter of 2020 (91% vs. 92% in Q1 2019), satellite radio’s reach was at 16% in both Q1 of 2019 and 2020. This comparatively small reach explains why satellite radio advertising represents an even smaller portion of the radio advertising pie. With a CAGR of 3.6% for the period of 2019-2024, ad spend is estimated to only reach $232 million, up from $178 million in 2020.

Magazine Advertising

The magazine advertising market is composed of two main segments: consumer magazines and trade magazines.

In 2020, the consumer magazine ad market in the US is estimated to be worth $14.1 billion – but this figure is expected to fall to $12.6 billion in 2024, resulting in a 5-year compound annual decline of 4.15%.

With a projected CAGR of 2.9%, digital consumer magazine advertising is expected to grow from $6.7 billion in 2020 to $7.6 billion in 2024, and will likely surpass print ad spend next year if projections hold true.

For its part, print ad revenue is forecasted to be $7.4 billion this year and drop to about $5 billion by 2024, with a 2019-2024 CAGR of -11.1%.

As in 2019, the digital side of trade magazine ad revenue will help to make up for print’s losses. Indeed, in 2020 digital advertising revenues are expected to surpass that of print advertising in the B2B trade magazine market for the first time, with ad spend in digital expected to be $1.9 billion this year, compared to print’s $1.3 billion. And, while digital has a projected CAGR of 4.4%, print will see an annual compound decline of 7.0%.

Out-of-Home Advertising

One market that has been hit particularly hard by the COVID-19 pandemic is out-of-home (OOH) advertising. After achieving new highs in revenues in 2019, by the second quarter of 2020 revenues had declined some 45% year-over-year, per data from the Outdoor Advertising Association of America. PwC’s forecast puts US OOH advertising at $6.9 billion for this year, which is quite the drop from 2019’s figure of $10.3 billion.

Although OOH won’t immediately rebound from this year’s upheaval, the analysis does show that by 2022 ad spend ($10.5 billion) will exceed 2019’s spend, and by 2024 it’s expected to reach $11.8 billion (CAGR 2.8%). Additionally, by 2023 the OOH advertising market ($11.5 billion) is set to overtake newspaper advertising ($11.2 billion).

This year notwithstanding, digital OOH remains the segment of OOH to watch, claiming a larger share of total OOH advertising every year, with a compound annual growth rate for the period of 2019-2024 of 7.7%. In 2020, digital advertising will account for $2.5 billion of total OOH advertising, but is forecast to grow to $4.7 billion by 2024. By contrast, with a CAGR of only 0.2%, physical OOH advertising is expected to account for $7.1 billion of total OOH advertising by 2024.

Newspaper Advertising

Much like with consumer magazines, newspaper advertising spend is continuing on a downward trajectory. And, although digital newspaper advertising will encompass the majority share of total newspaper ad spend by 2023, digital’s growth will not be enough to make up for the loss in print advertising.

As a whole, newspaper advertising is projected to drop from $13.1 billion in 2020 to $10.9 billion in 2024. The 5-year CAGR to 2024 is -6.3%.

PwC expects print advertising to retain the majority share of ad revenues in 2020 at $7.5 billion but forecasts that the print market will drop to $5.0 billion in 2024, making the compound annual rate from 2019 to 2024 -12.4%.

On the other hand, digital will see modest growth during the period, with 2020 ad spend expected to total $5.6 billion and rising to $5.9 billion by 2024 (CAGR 1.9%).

Another way newspapers make money is through circulation. That said, newspapers continue to struggle to gain subscribers both in print and digital. Per PwC, more news consumers are opting for free news aggregator websites like Google News, Apple News as well as social media platforms such as Facebook.

The push for more digital subscribers has resulted in an encouraging growth rate (CAGR 7.4%), however, with digital circulation revenues rising from about $1.0 billion this year to $1.3 billion in 2024. However, it remains lower than that of the income generated from print circulation, which is expected to be $8.7 billion in 2024 (CAGR -3.7%)

Video Game Advertising

With advertisers no doubt aware that since COVID-19 many gamers have reported spending more time with video games than they did in 2019, video game advertising is one of the few areas seemingly unaffected by COVID-19. Video game advertising is expected to continue its slow and steady growth in 2020, with an expected spend of $1.6 billion, and, by 2024 it is set to reach $1.8 billion.

Nevertheless, video game advertising represents only a minute part of the video game industry, which is a $28.8 billion market in the US. Even so, in 2024 the video game advertising market is projected to be about twice as large as the cinema advertising market.

Digital Music Streaming Advertising

Research by Nielsen from earlier this year found that the percentage of consumers who use free, ad-supported streaming audio services is far and above that of those who use ad-supported video. Comscore backs up this research, finding that, of the total number of digital music service accounts, more than three-quarters (77%) are ad-supported accounts.

This acceptance of advertisements as part of the service explains why the digital music streaming advertising market is forecasted to see steady, albeit modest growth in the coming years, increasing from $1.2 billion in 2020 to $1.7 billion in 2024 (CAGR 8.6%).

Podcast Advertising

The podcast advertising market is another area seeing growth and is expected to come out of the pandemic without seeing a slump in ad spend. However, growth this year may have been greater had COVID-19 not occurred. As listenership grows across age groups and more advertisers say they are likely to advertise in podcasts in the coming months, growth in the market seems inevitable.

Indeed, with forecast compound annual growth of 18.8% through 2024, when podcast advertising will reach $1.7 billion – more than twice as much as this year’s $0.8 billion, podcasts are the fastest-growing advertising platform within the music, radio and podcast market in the US.

Per PwC, this growth is explained, in part, by consumers seeing time spent on their own as an opportunity to be educated or entertained, and “because listening to podcasts when at the gym or when studying offers listeners a double sense of value.” Added to this, new short-form formats are likely to attract new listeners concerned about the time it takes to listen to a traditional podcast.

Cinema Advertising

Without a doubt, cinema advertising is the market hit hardest by COVID-19, and recovery will be slow in coming. PwC reports that by August 2020, only 65% of screens had reopened, and even then attendance numbers were smaller due to social distancing. If that wasn’t enough, the number of wide-releases has been drastically reduced compared to last year.

As such, US cinema advertising revenue in 2020 is expected to plummet 60% from 2019, plummeting from $1.0 billion to a scant $359 million. The long-term prospects for cinema advertising are equally discouraging, with PwC forecasting cinema ad spend at $0.9 billion by 2024 (CAGR -2.2%), such that it will not have recovered this year’s losses by then.

Unsurprisingly, box office takings will not fare any better. In 2019, box office revenues stood at $10.4 billion, but in 2020 takings will be just $3.5 billion. And, by 2024, box office figures will only reach $9.1 billion.

It’s worth noting that cinema’s troubles don’t all stem from the pandemic. Even prior to COVID-19, video streaming services were posing a threat to traditional cinema. Indeed, Hollywood Report and Morning Consult research shows that a majority share of young adults (ages 18-35) show a preference towards watching new release films through a streaming service instead of in the cinema.

For more on US media audiences, make sure to check out the 6th edition of MarketingCharts’ US Media Audience Demographics report.

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