top of page

Ad Spend Still Growing But At A Slower Pace, Says WARC.

In its latest forecast, WARC says ad spend is growing but at a slower pace. The slowdown has the media and advertising research firm reducing its estimate to $880.9 billion, removing $90 billion of growth potential for 2022 and 2023. That means digital media owners are “likely to fight harder for ad revenue growth – and, increasingly, will compete with one another for ad dollars,” the firm says.

The next 12 months “may usher in a new pattern for global advertising investment,” the WARC report says, citing all the usual suspects: economic crises, geopolitical complexity, spiraling inflation, supply chain disruption, and structural technology shifts. The whole ball of wax has marketers “re-evaluating their approach,” it says.

To attract more ad dollars, Big Tech companies are branching out. Meta has gone all-in with the metaverse, and Snap is investing heavily in augmented reality. And while TikTok remains red hot with ad revenue expected to jump 42% in 2023, WARC forecasts pureplay internet ad growth this year at just 5.5%, down from 42% in 2021.

Defying the slowdown, retail media has quickly become the fourth-largest medium by ad spend. The channel, which includes ad networks from Walmart, Amazon, Target, Kroger and others boasts global investment totaling $110.7 billion in 2022 and forecast to reach $121.9 billion in 2023 according to GroupM. It is on course to out-bill linear TV in ad sales by 2025.

“Meta’s first-ever year-on-year quarterly revenue decline, announced in July 2022, may one day be seen as the moment the digital advertising industry tipped into a new, less expansive phase,” says Alex Brownsell, WARC Media’s Head of Content.

The report notes that “the breakneck speed” of ad spend growth in 2021 “could never have been maintained” and contends that digital advertising investment has entered a new era of slower growth. Nearly a third of WARC’s Marketer’s Toolkit survey of advertisers expect 2023 marketing budgets to be lower than 2022. “Marketers are rebalancing their ad budgets, decreasing investment in offline channels and increasing spend in online video, social media and gaming,” the report says.

Kate Scott-Dawkins, Global Director, Business Intelligence at agency giant GroupM, sees “cautious optimism” for the year ahead. “Large declines appear limited to select channels in select markets,” she says. “And large advertisers, despite voicing caution in light of high inflation, are still posting solid revenue gains as sales hold up.”

More from WARC’s Future of Media report can be found HERE and HERE.

16 views0 comments


bottom of page