Group M released its mid-year 2022 revenue forecast this week for both global and US markets.

Here are some highlights from the US markets. You can read the full report at this link.

2022 U.S. MID-YEAR ADVERTISING FORECAST BREAKDOWN

Data from the U.S. Bureau of Labor Statistics (BLS) has shown persistent high single-digit increases in consumer prices every month during 2022, now a period with the highest rate of price increases for more than 40 years. In response, the U.S. Federal Reserve has raised and will continue to raise interest rates from historical lows, causing concerns that higher costs of capital will constrain economic activity before prices are under control, leading to fears of a stagflationary recession.

However, as negative as these factors are, economic conditions are actually not quite as bad as headlines might suggest.

THE IMPACT OF NEW GOVERNMENT POLICIES

Over the last 24 months, in particular, the U.S. government has made numerous efforts to regulate three of the biggest sellers of advertising by proposing or beginning to implement laws that are intended to constrain the choices those companies make and to generally limit their market power. Constraining actions, forcing break-ups or creating conditions where break-ups become more appealing than the status quo via policy is relatively certain. While any of these outcomes introduce certain problems or risks for the industry, it seems very unlikely that any of those actions will impact overall advertising growth rates. We generally retain the view that while such changes may impact specifics around where money goes within the ecosystem, we don’t believe they will impact marketer budgets by very much, if at all.

ADVERTISING INDUSTRY GROWTH

Generally, we hold the view that so long as real (inflation-adjusted) economic growth is positive, inflation should be a positive contributor to advertising growth.  We expect advertising in the U.S. …. to grow by 9.3% in 2022, slightly below our prior 9.8% forecast from December due to modest downward changes in digital advertising to better reflect updated data and commentary from the medium’s largest sellers of advertising.

OOH

Outdoor advertising continues to rebound as it progresses toward pre-pandemic levels. Early 2022 has been strong as audiences have returned, people spend more time enjoying life out of the home again and new movement patterns emerge.  However, economic challenges still present risks. We forecast 9.9% ex-political growth for 2022, following on 2021’s comparable 21.0% growth rate. Digital OOH inventory represents an increasingly large share of the business now, with just over a third of total revenue at present. We expect outdoor to exceed its 2019 volumes next year, indicating that much of the growth we are seeing now can still be characterized as recovery driven.

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