Amid Radio's Post-COVID Comeback, U.S. Expected To Outpace Global Growth In 2023.
While domestic and global advertising and marketing spending growth rates are predicted to take a hit this year, given a challenging economy, U.S. spending trends will continue to outshine those of global in 2023, according to market researcher PQ Media's just-released annual Global Advertising & Marketing Spending Forecast.
Following the U.S.'s 8.5% spend growth to $622.1 billion in 2022, PQ projects a more conservative 5.9% increase to $659 billion this year. Globally, ad and marketing spend, which grew 7.9% to $1.568 trillion in 2022, is expected to gain just 5.3% to $1.651 trillion in 2023.
While PQ's report cites the slowing economy's impact on digital and alternative media, it also notes that radio and out-of-home have made comebacks from the pandemic. In radio's case, that's due to more people traveling and commuting as COVID subsided, and to surging digital segments such as podcast advertising.
“Some brands cut budgets in the second half of 2022, leading to overall growth tapering into the first quarter of this year,” PQ Media CEO Patrick Quinn says, “but, while we expect slower full-year expansion in 2023, fears of a broad-based global recession have subsided somewhat. Despite the economic slowdown, many of the top 20 global markets and digital and traditional media platforms had returned to pre-pandemic levels by year-end 2022.”
PQ's forecast, which covers nearly 200 media sectors, silos, platforms, and channels, including ad and marketing sectors, shows that for 2022, global ad spend was up 7.5% to $714 billion while other forms of marketing gained 8.2% to $854 billion. Digital and alternative media spending showed a 13.0% lift to $746 billion, while traditional media spending rose just 3.6% to $823 billion. U.S. and global growth were driven by double-digit expansion in 35 of the 45 media channels tracked by PQ, led by smart technology marketing, streaming audio and podcasting, streaming video, digital out-of-home media, influencer marketing, and digital gaming.
PQ's predicted deceleration in ad and marketing growth for this year is due to macroeconomic and secular media trends stemming from the economic slowdown in the second half of 2022, given high inflation, continuing inventory and supply chain issues, energy supply shortages, and increasing interest rates, all of which have impacted the fast-growing digital and alternative media channels that fueled the post-COVID recovery.
“As we forecast back in 2021, we began to see a gradual leveling of some of the pandemic-fueled cyclical trends in 2022 and the re-emergence of secular trends that have been driving the media industry for years,” Quinn says. “Among the most prominent secular trends are the readjustment of the industry back to pre-pandemic status, in which the infusion of ad and marketing dollars from major even-year events, such as the Olympics, World Cup, and Presidential elections, are key drivers of year-to-year growth swings. Another key trend resurfacing is the continued shift of brand budgets from ad platforms used to increase brand awareness to marketing platforms that engage end users closer to the point of decision.”