The downturn in advertising is set to continue well into 2023. A recent survey by the World Federation of Advertisers (WFA) revealed that nearly 30% of major advertisers are planning to cut their ad budgets next year. 74% cited the current economic situation as the reason for these decisions.
However, it’s not all bad news. As many advertisers are either growing their budgets or keeping them the same. 30% of respondents said their 2023 advertising budget will increase, while 40% expect spending to stay the same. Despite this, 75% of respondents said their budgets are under “heavy scrutiny,” even if they’re not currently planning a reduction.
Many industries are now diverting funds away from traditional advertising channels and instead investing in direct-to-consumer marketing. This allows them to avoid dealing with ad exchanges and maintain customer loyalty during a potential consumer spending downturn. 42% of survey respondents said they would be spending more on digital advertising next year, with 50% planning to cut “offline” ad spending. This shift in spending makes sense as more and more consumers are cutting the cord and streaming is becoming increasingly popular.
However, while this is good news for connected TVs, media platforms, and others, they still have plenty of issues to work out if they want to claim a larger share of the advertising budget. Both connected TVs and podcasting have had significant fraud scandals in 2022, which is causing marketers to divert spending elsewhere.
Keeping it in perspective, 40% of advertisers say they plan to leave their budgets the same year over year. The larger trend seems to be that marketers are having to defend their budgets more vehemently as time goes on and the recession deepens.
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