“Coming after many quarters where the pace of growth was very consistent, it has slowed down quite noticeably,” says Vincent Letang, EVP, global market intelligence at Magna. “It can’t continue to grow by 20 percent like it did in the last few years forever.”
Early this year, digital ad sales reached a milestone, hitting 51 percent of total ad sales in the world. That saturation is contributing to a weaker forecast for 2019.
In addition, there is a lack of cyclical, marquee events for advertisers to pour funds into. “There are no elections, no Olympics, no FIFA World Cup,” Letang says. While the FIFA Women’s World Cup and the South American Copa América soccer tournament are currently underway, they are “nowhere as powerful at moving audiences and TV spend,” he adds.
But even when forecasters strip out cyclical effects entirely, Letang says, the overall trend for ad sales growth is down. For now, that effect is mitigated by higher-than-expected spending in the U.S. and China. “The surprise is the resilience of the U.S market. The first quarter was very strong, in line with 2018,” Letang says. Though reach and audience have been falling, prices are up 10 percent.