Recap: What’s Next for Media in 2024

This past year saw a weak and wobbly ad market. Ad buys are down or are being reallocated. Streaming services are under pressure to turn a profit. And while artificial intelligence is proving to be a boon to the industry, some concerns are arising as new regulations take hold. What’s the outlook for ad media in 2024? Sahil Patel, reporter for The Information, asked three media experts to take out their crystal balls and look into the ad market’s future:

• Laurel Rossi, chief marketing officer of Infillion
• Joe Marchese, co-founder and general partner at Human Ventures and Casa Komos Brands Group
• Grace Lee, partner, AlixPartners

The Ad Market Is Down…or Is It Up?

Sahil Patel started off the conversation by giving an overview of the current ad landscape. He talked about the tough ad market, with budgets down 20% to 30% from last year. However, he noted that there have been signs of a modest recovery. He asked the panelists what they’re seeing in the market.

Grace Lee of AlixPartners saw both positive and negative possibilities in the new year. “The heavy hitters of the advertising market will see a decline in media budgets.” But there’s good news, too. “A lot of smaller companies are actually seeing an increase of their marketing budget with one huge caveat: Like 2023, it will be a very volatile year.” She added that there will be a rotation toward digital channels.

The Platform Play

Patel noted the shift toward digital, and said that platforms like TikTok, Facebook and Amazon stand to benefit the most. He asked the panelists how they think that shift will happen.

Joe Marchese of Human Ventures had this to say: “I’m willing to bet that Facebook’s, Google’s and Amazon’s ad budget is going to go up by 20% or 30%.” But he also saw a significant pivot in the future. “I think you’ll also see the rise of retail media. I think all of this adds up to one big trend: a crowding at the bottom of the funnel. You’re really doing demand sorting, not really demand creation.”

How AI Will Change the Ad Market

The rise of AI has affected almost every aspect of business. Most of that rise has been positive, creating efficiencies, assisting in scientific research and helping creators. But how will AI affect the ad industry?

Marchese gave his point of view. “Brands as a wrapper for AI are going to matter again. AI has the potential to invert the business model of the internet, which is search and advertising. And that means every category: Travel, hospitality and media all start to become open again. I think that’s the most hopeful thing I can think of right now on the media side.”

Lee believes AI will be good for the industry. “AlixPartners’ perspective is that it will actually have a lot of room to work alongside creators.…I think there’s more hope than before. And there actually has been an over-bloated fear of AI.”

The Battle of the Streaming Services

As consumers move away from traditional TV, advertisers have tried to make up those losses on the streaming side. But the streaming landscape is disparate, with a few large ones (Netflix, Amazon, Disney), and many, many smaller streamers. Patel asked the panelists how they see the streaming universe in terms of consolidation and acquisitions.

Merchese said he believes more acquisitions are going to happen in 2024. Lee laid out the state of the streaming landscape and why it’s not sustainable. “Currently globally, there are 80-plus streaming services providers. But if you are outside of the top three streamers, you’re out of business.…So there’s only one way to go about it. Either some bottom tiers are dying or [they] have to consolidate.”

The Future of Programmatic Advertising

Consolidation is also starting to hit programmatic advertising. Patel wondered, “Who are going to be the winners and losers when the music stops?”

Rossi took up the question. “I feel like most of the [mergers and acquisitions activity] is going to happen on the ad tech side as well for advertisers. And I think that’s going to be superimportant to the entertainment business.”

A Glimmer of Hope on the Horizon

While no one can truly read the future, all the panelists agreed on the biggest trend for ad media this next year: volatility. But every shift in technology or the market landscape unearths new, exciting ways for brands to connect with consumers. It’s up to advertisers to grab the ring and dive headfirst into those new opportunities.