The days of double-digit growth may be behind the digital advertising industry, but the Interactive Advertising Bureau remains bullish on the outlook for 2023. The IAB is projecting a 5.9% increase in digital ad spending in the year to come, based on its survey of brands, ad agencies and marketing consultants. That is a decline from the 9% growth rate the digital ad industry is on pace to have this year.
One of the fastest-growing segments remains podcasting. The survey points to an expected 8.1% increase in ad spending on podcasts in 2023. That is ahead of what the IAB says the streaming music services are likely to see. The survey points to a 5.9% growth rate in ad spending on digital audio, excluding podcasts, next year.
Every digital channel is projected to post ad spending growth next year according to the IAB, while traditional media will lose ground. Yet only one will have double-digit growth. The IAB projects connected TV ad spending will climb 14.4% during 2023.
The uneven economy could see those numbers change, as nearly half (45%) of ad buyers say they will be adjusting their media plans at least monthly. And one in five say they will either do it daily (6%) or weekly (14%). In an indication of how budgeting has changed, just a third say they will make media plan adjustments on a quarterly basis. Instead, over 6-in-10 buyers (63%) will more frequently reforecast media plans in 2023.
The digital media space continues to get more crowded with new services like connected TV and gaming taking a slice of advertising budgets. The IAB survey points to podcasting holding its own with a 3.7% share of total spending, down from 3.8% this year, while digital audio’s share is expected to slip from 4.5% this year to 3.1% next year.
Part of the reason for audio’s slip is digital video continues to gobble up more and more ad dollars. Next year, the IAB projects more than one in five dollars spent on digital advertising will go toward digital video ads. While some of that has come at the expense of traditional broadcast and cable TV in the past, the coming year is forecast to see other channels like social media and digital display ads giving up share.
The automotive category once drove advertising, but the segment is expected to continue to be under pressure again in 2023 according to the IAB survey. It projects auto ad spending will decline another seven percent next year. But as Americans continue to hit the road after pandemic lockdowns, the travel category is on track to see some of the strongest growth. The survey points to a 21% jump in travel ad spending next year. Also forecast to grow are ad categories like restaurants (+17%), financial services (+11%), technology/telecommunications (+6%), and retail (+5%). But it is business-to-business advertising that the IAB projects will see the strongest year-over-year growth with a forecasted 21% gain in B2B ad spending next year.
The IAB’s survey also asked marketers and ad buyers what their top goals are for their media spending in the coming year. Unsurprisingly, acquiring new customers tops the list with 61% mentioning that objective. And 43% said they want to increase their brand equity. But media decisions are also strategic plays, with 35% saying they hope to improve their media efficiency in 2023 while 26% said their goal is to optimize their brand’s reach and frequency.
The survey data also shows that the ad tech investments being made by the podcast and audio industry are well-advised. That is because roughly half of advertisers are focused on cross-platform measurement, first-party data and attribution modeling.
The IAB’s email survey was conducted from Oct.18 to Nov. 7 among 223 buy-side ad investment decision-makers, primarily at brands and ad agencies. Download a copy of the results HERE.
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