WARC’s annual Future of Media report, part of it’s annual Marketer’s Toolkit, highlights key trends in three vital areas: advertising investment, media planning, and industry reform.
Based on data from WARC Media, findings from a global survey of 1,700+ marketers, and interviews with experts from EY, FramePlay, GroupM, Publicis Media and more, the report aims to help brands focus, survive and thrive in 2023.
1. Digital investment reaches the top of the ‘S’ curve
Digital advertising investment has arrived at the threshold of a new era of slower growth. After years of rapidly increasing spend, marketers are planning with more caution. This reflects broader economic concerns, dynamic shifts in Big Tech, and changes in consumer behaviour.
Nearly a third of WARC’s Marketer’s Toolkit respondents expect 2023 marketing budgets to be lower than 2022. WARC has downgraded its global advertising investment forecast to $880.9bn, removing $90bn of growth potential for 2022 and 2023.
Marketers are rebalancing their ad budgets, decreasing investment in offline channels and increasing spend in online video, social media and gaming. TikTok ranked top choice for increased investment in 2023 by 76% of marketers according to WARC’s Toolkit survey.
Kate Scott-Dawkins, global director, business intelligence, GroupM, comments: “There are multiple drivers pointing to cautious optimism [for 2023]. Large declines appear limited to select channels in select markets, like in France and Germany, where we downgraded TV growth as they continue to face energy shortages due to the war in Ukraine. And large advertisers, despite voicing caution in light of high inflation, are still posting solid revenue gains as sales hold up.”
2. Fragmentation calls for more fluid media planning
Media effectiveness is becoming harder to achieve. Linear TV reach continues to decline, while digital consumption is fragmenting across platforms and technologies, from new social apps to proto-metaverse gaming environments. The need for adaptable, innovative media planning has never been greater.
More than a third (34 per cent) of survey respondents identified media and audience fragmentation as one of their biggest causes for concern when drawing up plans for 2023. The situation calls for advertisers to adopt a more fluid approach to media planning and branding, and one that emphasises the importance of communities over basic demographics in segmentation.
While over half (52 per cent) of Marketer’s Toolkit survey participants expect to increase investment with social media influencers and creators as a whole, two-thirds (65 per cent) are planning to work with content creators to connect with communities “aligned with specific interests authentically tied to the brand”.
Nadia Mozorova, global measurement & insights lead, EY, said: “In order to stay relevant, brands need to identify communities and create messages which will appeal the most to the needs and challenges of these communities. From a research perspective, companies should look for ways to move from a traditional type of segmentation (age, gender, education, place of living) to segmentation based on identifying and understanding different consumer mindsets and psychological need states.”
3. Fixing the media ecosystem
Whether assessing the impact of advertising on climate change, the role of media investment in supporting diversity, equity and inclusion, or the need to address a growing talent crisis, the media industry finds itself under increasing pressure to reform.
Preeti Mascarenhas, APAC head of strategy and product, Mindshare, comments: “Conscious consumerism is on the rise. It’s a key area Asians look for in their stop-go-lives. In a nutshell, it’s about being more focused on things that worry consumers and what they care about. Brands will benefit from more responsibly designing data solutions and also selecting channels and platforms that consumers perceive as making the world a better place.”
More than half (54 per cent) of US respondents to the Marketer’s Toolkit survey said that media planning recommendations in 2023 will include more diverse publishers, reflecting the importance of minority audiences in that market.
However, with only a third (34 per cent) of advertisers planning to include more low carbon alternatives in their media plans in 2023, it is clear more work must be done to persuade marketers of their role in combating climate change.
Find a sample of the full report here.