Marketing Trends in Ad Spending
Sep 08 2023
At first glance, rising inflation and a potential economic recession might make marketers nervous about the health of their ad budgets. Businesses tend to pull back on marketing efforts and divert funds to other operations in times of financial duress. That doesn’t seem to be the case so far in 2023 though — ad spending looks to be consistent, and in the case of some media channels, even stronger. What’s changing is which channels will receive the most ad dollars.
Keep reading for a closer look at the digital market, ad spending trends we’re seeing develop in 2023, and what this all means for planning future campaigns.
A Glance at the 2023 Digital Market
Forecasts show worldwide digital ad spending reaching $626.86 billion in 2023, which accounts for just over 67% of total media ad buying. Digital ad spending in the US is expected to grow to $278.59 billion this year. eMarketer notes that while this number is slightly lower than their original estimate, it isn’t cause for concern.
Recent survey data shows most marketers agree. Many plan on increasing (or maintaining) ad spending in 2023, with 54% of companies expected to increase their budget and nearly 30% planning to stay consistent with the previous year. Digital marketers will focus on gaining a competitive edge over those who choose to reduce ad spend by opting to build and/or maintain momentum into the new year.
This strategy is partly informed by marketers scaling back ad spending in 2022 to align with shifts in the market. Because market stability is largely unchanged from the year before, marketers better understand how to approach advertising in 2023. Concerns about inflation, recession, and supply chain logistics remain, but these factors are considered to have a temporary impact on campaign planning.
The Trends Shaping Digital Ad Spending
Considering the average marketing team devotes more than 65% of its total budget to digital efforts, designing ad strategies around the channels and platforms expected to provide the best ROI is essential. Social media has been the go-to medium of late, especially with social commerce’s growing popularity. But continuing changes in data privacy laws and the deprecation of third-party cookies have marketers exploring other channels where budgets might be better spent.
CTV has emerged as the channel of choice for digital advertisers. Consider these compelling statistics:
– Globally, 28% of brand advertisers expected to maintain their 2022 CTV budgets into the new year, but 60% said they plan to increase spending in this area.
– Although eMarketer adjusted its 2023 US digital ad spend forecast to reflect a decrease in overall spending, it increased its “CTV ad spending forecast by $3.02 billion to $26.92 billion.”
Marketers certainly aren’t abandoning paid social. Approximately 50% of teams plan to increase spending, and influencer marketing — which thrives on social media — is gaining popularity among today’s advertisers as well.
Digital out-of-home (DOOH) advertising is also picking up speed. One key explanation for this: many consumers opt to avoid ads by blocking or skipping them — or bypassing ads entirely by paying for ad-free streaming subscriptions. DOOH advertising can reach target audiences without the worry of users never seeing the ad at all.
What these ad spending trends mean for marketers
More stringent restrictions around the collection and use of consumer data combined with more “opt-out” opportunities pose challenges for marketers who rely on this type of data to help determine budget allocation. Channel diversification is crucial, then, not just for simultaneously maintaining audience reach and complying with data privacy laws, but for gaining new insights that can inform new strategies going forward.
The Road Ahead
Despite new challenges, digital advertising in all its forms is still an extremely viable and important component of omnichannel marketing strategies. Research from eMarketer indicates, “US digital ad spending will grow by nearly 50% in the next four years. By 2025, the digital ad market will top $300 billion—more than three-quarters of all media spending.”
Flexibility is key for advertisers who want to reach target audiences in today’s digital landscape. Tried-and-true channels — such as paid search and social media advertising — are still effective, but they should be paired with programmatic tactics, like DOOH, to get a more complete picture of what today’s consumers respond to.
Top-of-funnel tactics are also more important than ever. First-party user data will be instrumental in shaping full-funnel campaigns, which is why we may see more interactive CTV ads going forward.
What matters most is that marketers continue to communicate with consumers. Maintaining a connection with both new and existing customers helps to ensure that your business endures through uncertain financial times and evolving advertising landscapes.
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