Analyzing the Presidential Election's Potential Impact on Legacy Media: The Numbers Speak

According to a recent report from S&P Global, both the upcoming presidential election and the Paris Olympics are projected to boost ad revenue for legacy media. While this increase may help offset other declines, it is unlikely that linear TV and print will fully recover to pre-pandemic levels. However, U.S. digital advertising revenue is anticipated to rise by 10.2% in 2024.

The surge in revenue for traditional media outlets may only be temporary, as the long-term outlook remains grim. By 2025, digital advertising is expected to make up almost 75% of total advertising, while local and national television advertising are predicted to decrease by 2% and 0.8% respectively.

The "U.S. Advertising Forecast Powered By Digital" also examines the impact of economic growth, inflation, and unemployment on advertising and consumer spending.

Elections and Olympics

During non-election years, legacy media typically experiences a decrease in advertising revenue. In 2023, this type of advertising saw an approximate 8.5% decrease, with linear TV as a whole suffering a 10.8% decline, according to a report. These figures are influenced by reduced political spending in 2023 compared to 2022.

National TV is particularly vulnerable to the swift transition to digital advertising, especially within the general entertainment and lifestyle networks. These channels have been significantly impacted by declining viewership ratings, particularly when they lack popular sports programming to attract viewers.

In the upcoming months, cable advertising is projected to decrease by 4%, while broadcast TV is expected to experience a 6.7% growth. This growth is largely driven by the upcoming Paris Summer Olympics, which is a significant event for broadcast TV, according to the report. Excluding the event, a 6% decline in core broadcast TV advertising is anticipated.

The report stated that national TV will likely see a divide between networks with strong sports and news content, such as the NFL and coverage of presidential elections, and those without. Political advertisers typically turn to news programming during election season, but even with increased political ad spending, traditional media may still struggle. S&P forecasts that lower economic growth, along with high inflation and interest rates, could impact legacy advertising spend.

GDP on the ballot

Amidst the excitement of the Olympics and a presidential election, the economy continues to be a crucial factor for success in the advertising industry. Although these high-profile events will have a positive impact on traditional media, the overall performance of advertising largely hinges on the state of the economy and consumer spending behavior.

The U.S. GDP, a crucial measure of the economy, is projected to increase by 1.5% in 2024, factoring in inflation. The following year, in 2025, it is expected to grow by 1.4%. On the other hand, consumer spending, which is usually more closely linked to advertising, is anticipated to surpass the GDP, with an increase of 1.8% in 2024 and 1.6% in 2025.

Despite the contributions of increased consumer spending, the upcoming elections, and the Olympics to maintaining the relevance of traditional media, digital media remains the unquestionable victor. As a whole, advertising experienced a 3.7% growth in 2023, while digital advertising, encompassing search, retail media, social, and video, surged by an estimated 10.5%.