Digital Advertising to Dominate 2023 Ad Spending
Some may consider them the equivalent of coal in their stockings but among all the sparkle and cheer, the annual forecasts for ad spending next year have arrived. The consensus among three of the primary sources of these annual forecasts is US ad spending will increase.
Borrell Associates – a 3.2% increase in local ad spending
BIA Advisory Services – a 0.5% decrease in local ad revenue, but a 4.8% increase, excluding political spending
Magna – a 3.7% increase in total US ad spending
Keep in mind, 2023 is one of the cyclical years without billions in political ads or major, global sporting events, such as the Olympics and the World Cup. Expect ad spending to be sluggish during the first half of the year and then improve during the second half as the housing and automotive markets stabilize.
A closer look at these three forecasts reveals digital ad spending will increase as most legacy media will decrease. Borrell predicts local ad spending on digital formats will increase by 7.7% YOY while non-digital formats will decrease by 5.9%.
Comparison of Media With Largest YOY Increases
and Decreases in Local Ad Spending
| Largest Increases | Percent | Largest Decreases | Percent |
| Video/OTT | +12.6% | Local TV | -18.0% |
| Digital audio | +10.4% | Directories | -8.7% |
| Targeted banners | +10.1% | Newspaper | -7.1% |
| Listing sites | +7.0% | Cable TV | -4.6% |
| +6.4% | Direct mail | -2.0% |
Borrell Associates, November 2022
BIA Advisory Services reports traditional local media revenue will total $84 billion and digital media revenue $81 billion for 2023. Among the digital portion, TV digital, with a smaller base, will increase by 17.3%, Over-the-Top (OTT) by 12.3% and mobile by 8.1%.
Magna’s analysis of total 2023 US ad spending indicates search and out-of-home will increase the most at 11% and 7%, respectively. Broadcast radio will decrease by 4% but increased spending in podcasting and streaming audio will push the overall audio medium to a 0.5% increase.
Of course, the push and pull of macroeconomic and microeconomic trends will affect the reality of 2023 ad spending. A decrease in inflation will be a positive for advertisers as well as consumers who are responsible for approximately 70% of the entire US economy.
