Is Ad Spend Growth Growing or Slowing?

New research offers a detailed forecast of ad spending growth for 2023. But is there any way of knowing which direction that growth is going? Are there signs of an ad apocalypse a-blowing? Here’s a clear view of what the data is really showing.

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Aired: January 27, 2023

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Hello there and welcome. Is marketing and advertising spending going up or down? Or is it going down, but growth is going up? Or is staying flat, or is staying flat the new going up – and does any of this make any sense? Well, a new research study says we might return to the old world of the new beginning of the “old normal” for growth, but it’s just slower than before. Is all that clear? Are you ready for what’s new that you need to lead in marketing? Let’s roll.

Hello everybody. Robert Rose here with the news. It’s what’s new, but – more importantly –what’s important in the world of content marketing. And for the best in best practices – you can always go to contentmarketinginstitute.com.

Over the last six months, there has been no shortage of hot takes and research on where advertising and marketing spend would end up in 2023.

In December, many said that the ad spending forecast was cloudy with a chance of recession. Others were saying that marketing and ad spend growth were expected to slow even further in 2023, which was a troubling sign for media and tech firms. You even had others talking of the advertising apocalypse.

But while those were fearful headlines, if you read any of those stories, buried in about the third or fourth paragraph was something to the effect of, “well, digital growth is slowing and the growth is probably going to resemble the pre-pandemic growth – not the astronomical growth of 2021.”

Yeah, it all sounds a bit confusing.

A new (and, I have to say, quite good) research study has just been released by the Winterberry Group. It’s entitled, Outlook for Advertising, Marketing and Data 2023 – Clouds on the Horizon? (registration required), which, when you read it, sounds a little like “I’m Ron Burgundy?”

In any event, this new research is extraordinarily detailed, and it gives some real clarity in terms of looking back to what happened in 2022 and what may be ahead in 2023 and beyond.

They come to many of the same conclusions that other research has. To be clear, it’s that the growth in marketing and advertising spending will be lower in 2023 than it was in 2022, and significantly lower than it was in 2021. In 2021 there was a 20.8% growth in U.S. advertising and marketing spend.

That’s huge. Honestly, we’re all feeling, now, the hangover of that drunken binge in 2021. Big tech companies, ad companies hired like that post-getting-back-to-consuming-things, back-to-normal, getting-out-of-our-house-and-eating-Cheetos thing was going to go on forever. It was irresponsible to be sure, but there ya have it.

But if you look at 2023 through, well, Rose-colored glasses (see what I did there), what you’ll see is 5.9% growth this year in marketing and advertising spend. That’s healthier growth than we saw in 2019 or 2018, and even 2017. So, we are back to pre-pandemic, and much more sane, healthy levels of marketing spend.

That 5.9% growth means we’ll move from about $480 billion in 2022 to about $508 billion in 2023.

The research looks at where that growth may go – where will we spend all that dough? And the answer is, well, inflation. At least, as I see it. CPMs (cost per thousand) are a little like a dozen eggs these days – getting crazy expensive. According to the research, Meta’s (meaning Facebook’s) CPM has increased 61% year over year, TikTok’s has increased a monster 185%, Google display ads have increased 75% year over year, and search cost-per-click has increased 14%.

Additionally (as we also predicted at the end of last year), it looks like 2023 is going to be the year of leads leads leads. Account-based marketing and B2B demand generation will increase significantly this year.

Related: 80+ Content Marketing Trends for Success in 2023

And then finally, what I found to be really interesting, and a trend from this research the Winterberry Group found is that, in most years, the rate of marketing spending aligns with the growth rate spend on agency services. But the research is forecasting agency spend to exceed the marketing growth rate, with a 7.4% run rate.

What’s our take here at CMI?

All this points to something we see a lot of, and marketing is becoming a hyper-complex operation. And, finally, businesses are beginning to see this complexity and lean into it, rather than shy away from it. They are bringing in extra external help, where necessary, but building in the institutional needs to bring complex processes, content creation, measurement, and data to the forefront.

That’s why I’m bullish on marketing and advertising in 2023. The growth in spend may be down, but it’s back to the same levels of where it was. And the emotional, talent, and complex investment into marketing is going in the right direction.

Growth ad spends may be down, but the emotional, talent, and complex investment into marketing is going in the right direction, says @Robert_Rose via @CMIContent. Click To Tweet

Couple that with a recovery or increase in spend toward the second half of the year and I think we’ll start to see all that great talent that’s out there, having been recently laid off, transform into another hiring spree for those looking to grow even faster. It’s a forecast, not for clouds on the horizon but, rather, a partly sunny new year.

But what do you think? Let’s discuss. Where’s your marketing budget, and content budget going?  Up? Down? Staying the same?  And where is it going? Are you spending more on paid media? Investing more in owned media? Investing more in talent, technology, and data? Where is your marketing investment headed?

For now, that’s five minutes of what’s new that, hopefully, you can use to lead your marketing strategy. I’m Robert Rose and remember, as always, it’s your story to tell – tell it well.

I’ll see you next week.