Ad spending forecast to grow 6% in 2023 as digital priorities shift

Dive Brief:

Advertisers are expected to spend an estimated $509 billion in 2023, up 6% from $481 billion last year, according to findings by the Winterberry Group shared with Marketing Dive.
An estimated $307 billion, just over 60% of the total, is expected to occur on online channels, according to the report, “The Outlook for Advertising, Marketing and Data 2023.” CTV is expected to be a big recipient of investments, growing at a rate of 27%.
Investments in data segments, including data, data services, platforms and identity are projected to increase 7% year-over-year for a total of $34 billion.

Dive Insight:

The Winterberry Group’s report pushes back against some of the grimmer trends seen in the second half of 2022, when the industry began losing steam. Inflation and economic woes have put a strain on the industry, leaving some in fear of what 2023 will hold. While digital growth is likely to decelerate in the months ahead, overall it will remain strong, with certain sectors expected to see significant growth, per the report.

Investment shifts within the digital advertising sector are not surprising, given the momentum behind CTV, digital out-of-home and influencer marketing. While CTV is leading the digital growth pack, digital-out-of-home channels are expected to grow 10% while influencer channels are expected to grow 17.5%.

An overarching theme is how budgets shifts within digital marketing are likely to have a bigger impact on the landscape in 2023 than the years-long shift away from offline channels. The total offline spend in 2023 is estimated to be at $201.9 billion, with newspaper, magazine, radio and linear TV spend to drop between one and eight percent.

An increased reliance on artificial intelligence (AI) and the need for ongoing updates to data infrastructure are also bound to impact the marketing industry.

“The rising cost of digital media and shifting consumption patterns is encouraging marketers to shift spend not just amongst channels, but among providers who have the ability to target hard to reach niche audiences,” said Senior Managing Partner Bruce Biegel in a press statement. “We expect the growth rate of digital channels to decelerate but remain strong.