The U.S. economy is in “decent” shape, according to Vincent Letang, head of global market intelligence at Magna, but marketing and advertising is always vulnerable in times of economic slowdown.
“Inflation slowly receded and GDP growth was decent in the second half [of 2022],” Letang said in a report presentation. The ad market also won’t get a boost in 2023 for cyclical ad spending events—there are no elections or Olympics this year—which usually account for about $7 billion in ad spend during even-numbered years.
Although recent financial turbulence from the banking crisis may hurt consumer and business confidence, Letang said “the economic fundamentals have improved in the first quarter” with unemployment remaining under 4%.
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“In a similar economic climate 10 or 20 years ago, the U.S. advertising market would almost certainly fall off a cliff,” Letang said. “Things are different in 2023 because of media innovation fueling marketing demand.”