Good morning. Yet another ad forecast is getting adjusted higher, the WSJ Leadership Institute's Megan Graham writes for the newsletter:
Ad spending in the U.S. will increase an estimated 12.3% in 2026, the Interactive Advertising Bureau said in a new report Thursday morning, up from its January forecast of 9.5% growth.
Stronger-than-expected advertising around events like the Winter Olympics and the FIFA World Cup got the year off to a blistering start, the ad trade group said in the report, which is based on survey responses by ad investment decision makers at brands and agencies.
Respondents are reporting less concern than in January about macroeconomic headwinds affecting ad investment, according to the IAB. And anticipation for midterm campaign spending is growing.
But budget pressure on consumers, whose economic sentiment remains low, is influencing how marketers are spending.
"Consumers are becoming more discerning," Chris Bruderle, vice president of industry insights and content strategy at the IAB, said in a statement. "They're switching brands, paying for lower-priced brands and looking at store brands."
"For brands, that means two things. They need to make sure their brand equity is strong, particularly in AI environments. And if people are more willing to switch brands, there's an opportunity to acquire new customers."
Megan's IAB report follows a series of other upward revisions by industry players and observers.
WPP Media boosted its global and U.S. predictions in June. Advertising by AI companies and traditional businesses deploying AI is "providing a powerful countervailing force to external economic headwinds," the new report said.
Madison and Wall did the same just yesterday, calling out factors including AI; the longer, more-watched and better hydrated World Cup; and consumer spending among the higher-income leg of the K-shaped economy.
"We estimate that venture-funded AI companies alone have added more than one percentage point to U.S. advertising growth," Madison and Wall wrote.
Consumers are more in play than we expected in January, and the competition's fiercer. Make sure your marketing budget fits the (updated) moment.
Who's Going to Reunion?
Reuniting cast members from classic TV shows and movies has become a go-to advertising strategy, with stars of "The Office" getting together to promote AT&T Business, "Scrubs" actors hawking T-Mobile in a long-running campaign and the "Breaking Bad" guys pitching PopCorners-to name a few.
But the risk of exclusion is always there, as when Walmart failed to secure Rachel McAdams to reprise her Regina George character for its ad bringing together the rest of the "Mean Girls" principals.
And beware the showrunner's wrath.
After an ad for Jake Paul's gambling app Betr put "Entourage" stars Adrian Grenier and Jeremy Piven together again, creator Doug Ellin let loose, Variety reports:
"Many people worked really hard to make our show as good as it was," Ellin wrote on Instagram. "When I see cheap... imitations that try to pass for what we did it makes me puke." ... Ellin said he's not bitter over not being paid for the ad. He simply wishes the writers of "Entourage" would get more credit for the hard work they put into the scripts and character development, only for their work to be distilled into an "embarrassing" emulation of the HBO hit. "I watch it and I want to throw up, because I would suffer, along with many other people, over every syllable, every... word," Ellin said.
Betr isn't counting on hugging it out with Ellin, responding in part, "We appreciate Doug watching the ad and helping promote it."
The Magic Number
Percentage points shed from merchandise margins at American Eagle after fashion trends shifted quickly, leaving the brand with a lot of behind-the-curve women's jeans to work through with promotional markdowns while it introduces more current items
Quotable
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