The Canadian ad market is expected to grow by 2.9% to reach $20.7 billion this year, according to Magna’s mid-year advertising forecast, but that is a sharp reduction from the 4.3% increase predicted in December.
Magna revised its predictions after the Canadian ad market was flat in the first quarter of the year with all-media ad sales down 1% year-over-year. The IPG agency trimmed its forecasts to varying degrees across several major markets; globally, it is now predicting 4.6% ad growth, down slightly from the 4.8% predicted in December.
In addition to the global economic outlook, other factors in for the decline include the modest first quarter revenue growth reported by Canada’s major media companies.
While Rogers’ media revenue grew in Q1 with sales up across TV, radio and digital, some of the growth was also due to the company’s ownership of the Toronto Blue Jays, as revenue was still behind expenses. Quebecor’s TVA had increased ad growth of nearly 5%, but the company’s CEO remained uncertain about its future economic outlook. Bell Media’s ad sales fell 5%, with Corus’ declining 8%.
Digital ad sales are expected to grow by 5% in Canada this year, accounting for 78% of the country’s total ad market. Social media will experience a recovery, growing by 7% after slowing globally last year to a 1%. Other segments within digital that will grow in 2023 include search, with growth of 5% and account for 40% of the Canadian advertising market, and digital video, which will jump by 6%.
Out-of-home is also expected to continue on its upward trajectory to grow by 4% this year and to exceed its 2019 high in 2024.
Sales declines are expected for television, radio and print this year. Radio ad sales will shrink by 4% following last year’s gain of 3% and will capture 5% of total Canadian ad. A big decline is forecasts for print sales via a 13% drop, accounting for just 3% of the ad market.
On TV, the lack of major cyclical events will contribute to a 3% drop in 2023, in addition to continuing audience erosion and decreasing advertising demand. Sports, however, could come to the rescue. According to Bell Media, 17.3 million unique viewers (45% of Canada’s total population) watched Superbowl LVII, with combined livestreaming viewership up 26% compared to 2022. With three Canadian teams in the first round of the Stanley Cup playoffs this year, linear TV ratings and streaming subscriptions increased for Rogers.
Looking ahead, Magna expects that, from 2024 to 2027, ad sales will grow by an average of 3.9% per year, compared to 4.2% predicted in December. The Canadian advertising market will end 2027 at $24.2 billion. Digital advertising sales will average 6% annual growth and OOH 5% during that time, while television sales will drop an average of 4%, radio by 5% and print by 12%.
