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According to JPMorgan Chase, 65% of middle-sized businesses and 61% of small businesses expect a recession in 2023. What’s more, in a survey conducted by The Wall Street Journal, 61% of economists think we’re heading toward an economic downturn.
A lot of signs are pointing that way. The unhinged inflation, the energy crisis in Europe, and the political turmoil aren’t helping forecasters look at the full part of the glass – au contraire, they’re fuel for a smoldering fire. Some call it a slowcession, richcession, and the most pessimistic ones are warning about a deflationary depression to rule all that came before it.
To top it off, news of shifting privacy policies and the wildfire-like spread of AI complement what seems like a doom-and-gloom scenario worthy of our worst nightmares.
The operative word here is “seems.” Sure, there is a lot of uncertainty hovering over our heads. And yes, it might feel like the horns have been blown on a year that will change everything we know about advertising. But when we asked 200 advertisers what they thought about advertising in 2023, we breathed a sigh of relief – people are far more optimistic about the prospects for this year than news headlines would have you believe.
Here’s what our survey revealed.
Our research was conducted by Censuswide, with 200 18+ respondents with the following job titles:
The advertisers we surveyed came from companies with at least 20 employees, in a variety of industries:
Our respondents are based in the U.S., and the survey was run between February 15 and February 28, 2023. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.
Of all 200 respondents that answered our questionnaire, 60.5% said they have seen an increase in revenue in 2022, in the companies they work with/ for. Moreover, 31% said the 2022 revenue was linear, and only 8.5% of these respondents saw a decrease.
Despite news of recession, AI, and shifting privacy policies, most advertisers we surveyed are optimistic about their ad budgets. More specifically, 68.5% of respondents feel good about their budgets. Moreover, only 18.5% of respondents felt “neutral” about their 2023 ad budgets, and even fewer (13%) said they were pessimistic.
Interestingly, a larger share of the respondents working in agencies showed themselves more optimistic than those working in-house/ for a brand (but not by a lot, with 71.88% of agency advertisers saying they’re optimistic and 66.91% of the in-house ones confirming the same idea.)
There might be a reason many advertisers feel optimistic about their 2023 budgets. Despite the economic downturn and all the heralding around it, more than two-thirds of our respondents (70.5%) said they got more budget in 2023. In most cases, the budgets didn’t see a large increase (less than 10%), but it seems to be enough to give everyone hope.
What’s more, 25.5% of the advertisers who replied to our survey said they’ve received a budget increase between 10% and 40%. Only a total of 13% saw a decrease in their ad budget (but never for more than 40%.)
In-house and agency advertisers had similar outlooks on ad budgets. Most of our respondents in both in-house positions (43.38%) and agency roles (46.88%) noticed an increase of up to 10% in their budgets. Moreover, similar percentages of in-house advertisers (25%) and agency advertisers (26.56%) said they received a budget increase of 10 to 40%.
This finding is in line with previous findings by Magna and GroupM, which forecasted that advertising budgets will increase in 2023, but not by as much as it was initially thought (with an average lying at around 5%.)
Another sign that the ad industry is doing well is that a very large percentage of respondents are more than open to trying out new platforms this year. A very optimistic 69% of advertisers said they’ll try new channels in 2023, 28% said they won’t, and only 3% of all respondents said they’ll drop the number of channels.
According to our survey, people working in agencies were happier to experiment with new ad platforms (73.44% of them said so), but in-house advertisers weren’t particularly reticent either (66.91% of them said they’ll try out new ad platforms this year.)
In our survey, 28% of the respondents said they are more likely to invest in conversion-oriented, bottom-of-the-funnel ads. However, traffic (middle-of-the-funnel) campaigns came in closely at 26%, and awareness (top-of-the-funnel) ads scored 23.5%. Almost a quarter (22%) of our respondents said they’ll distribute their budgets equally among the different stages of the buyer’s journey.
We had to ask the question on everyone’s lips: how are advertisers planning to use AI technology in their day-to-day work? The answers were not shocking: almost half of our respondents (48%) want to use AI for scripts and copy. What’s more, a large chunk of advertisers have shown interest in using AI for ad creatives (44.5%), and 44% said they’d use AI to build strategies as well. Whichever way you look at it, most of the advertisers are ready to leverage the power of AI to free time on their hands, give their budgets a bit of leeway, and “do more with less.”
Of all our respondents, in-house advertisers showed slightly more interest in AI for scripts and copy (49.26%, respectively 48.53% of them said they’ll integrate AI tech in this area of their work.) However, agency respondents didn’t fall far behind, with 45.31%, respectively 46.88% confirming the same interests.
According to our survey, more than half of advertisers (50.5%) think more automation tools will grow in popularity in the advertising space (as a result of the reduction in workforce.) Interestingly, 42.5% of our respondents also thought the market will start to go through a sifting process, leaving it with fewer inexperienced advertisers.
Despite the overall optimism, 34% of advertisers also believed they’ll see less results for the same ad spend (as compared to 2022.). And while budget cuts didn’t seem to affect most of our respondents, more than one-third (39.5%) of them did believe budget concerns will make the market a less competitive place.
In this area, more in-house advertising pros were more inclined to believe they’ll see less competition because of the budget reductions (41.91%.), while a more conservative 34.38% of agency advertisers believed the same thing.
We wanted to see which advertising platforms are gaining traction and popularity with advertisers in 2023. So we asked our respondents to rate some of the most popular channels with one of the following attributes:
The channels we included in this question were:
The results were quite surprising. Bing ranked as the most popular platform in the “Currently Using” section, Spotify landed on the second spot, and LinkedIn on the third one. As for what advertisers are interested in trying in the future, LinkedIn, Reddit, and Pinterest took the podium.
A total of 74,5% of our respondents said they had used and/or currently using Google Ads, showing that, despite the growing interest in other platforms, Google remains an unchallenged king of the digital advertising space.
Using a similar approach as we did with the different ad platforms mentioned above, we wanted to see which types of ads won our respondents’ attention and budgets this year. This time, we were not that surprised, as Display took the first place, followed by Social, Video, and Search ads (in that specific order.)
Advertisers are fearless. While their budgets may not be as high as they should, most of the people who agreed to answer our questions are quite optimistic about the 2023 outlook. Yes, many will leverage AI technology. And yes, some are making shifts. But overall, things aren’t looking gloomy in the ad space.
Expectations, hopes, and forecasts can’t replace reality though – so only the future can tell what’s around the corner for us all.
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