As advertisers reevaluate their budgets and their new priorities in the face of potentially ongoing inflation, they are still growing their ad spend. A new report by the IAB reveals that while advertisers will increase their spend in 2023, the growth will be focused on a few key areas.
Where advertisers will be spending the most
Next year’s overall ad spend growth will drop meaningfully from 2022’s nine percent rise in ad spend over 2021, estimated to reach only 5.9 percent. Advertisers’ biggest increase in spending will focus on four key segments. B2B ad spend will rise by 20.8 percent, travel by 20.6 percent, restaurants/beer/liquor/wine by 17.1 percent and financial services by 11.1 percent. Not surprisingly, these are among the business sectors most vulnerable to inflation, making the competition for consumer dollars more intense. The report states that other sectors will face only single-digit growth. Digital channels will see positive ad spend growth, with CTV seeing the highest level, at 14.4 percent, while spending on traditional channels will decline.
Advertisers will focus on customer acquisition and brand equity in 2023
Sixty-one percent of consumers will focus on customer acquisition in their 2023 marketing strategy and ad spend, with brand equity (43 percent) and improving the efficiency of their media efficiency (35 percent). According to the report, between 52-55 percent of advertisers will focus on measurement, marketing mix and modeling (MMM), as well as the use of 1st party data, and investment in creators in 2023. Yet that may change: Sixty-three percent of ad buyers stated that they anticipate changing their media plans more frequently in 2023 than they did in 2022—at least once per month.
Retail media networks and the metaverse take center stage
The IAB report reveals that sixty-one percent of ad buyers have invested or will invest in retail media networks (RMN) advertising, and investment in 2023 will rise by 28.4 percent. Key areas of advertisers’ ad investment include onsite owned and operated, (91 percent), aggregated marketplaces (82 percent), retailer-owned (75 percent), and e-commerce owned (64 percent).
The report also showed that 56 percent of ad buyers have invested or will invest in metaverse advertising/marketing, with many focused on building brand awareness (52 percent), engaging existing customers (48 percent), and reaching hard-to-find audiences (42 percent).
Read the entire report here
1. Rugabear, Christopher. How inflation spread across different sectors, making it harder to tame. https://www.pbs.org/newshour/economy/how-inflation-spread-across-different-sectors-making-it-harder-to-tame. October 2022. Accessed November 2022.