For all the talk about economic uncertainty this year, several metrics don’t fit neatly into the narrative. First, U.S. job growth has been very strong in recent months, with 476,000 jobs added in January, following the spectacular 510,000 jobs added in December.
Then there’s the continuing decline in inflation. The annual inflation rate in the U.S. slowed for a sixth straight month in December 2022, to 6.5%, the lowest monthly tally since October 2021. That figure follows a rate of 7.1% in November. Both are down substantially from the June 2022 peak of 9.1%.
Inflation in the media world will be even lower, according to a new report from ECI Media Management. In its Q1 2023 estimate, ECI predicted that U.S. ad-cost inflation will decline 1.7 points this year to 4.2% from 5.9% in 2022.
Consequently, publishers that are jittery about advertisers’ plans for this year will be pleased to know that marketers are going to spend more this year, according to a study on digital advertising trends that was released last month by the ad platform Smartly.io, working with Insights Worldwide Business Research.
While the focus for this survey was on digital ad spending, it likely represents a pattern will apply to other forms of media as well, including print.
Specifically, according to the survey, 60% of responding marketers said they’re investing more in digital advertising tools and technology. And 49% will increase spend on programmatic advertising.
Beyond that, when respondents were asked what they plan to spend this year, 41% reported that they’re spending $5 million to $10 million on digital advertising this year. Another 27% said they’ll spend between $10 million and $20 million, while 22% indicated a budget of over $20 million.
For the study, 100 marketers from across the U.S. and Canada were surveyed. All responding individuals were director-level or above, with positions in digital marketing, digital advertising, performance marketing, and ecommerce. They represent $1 billion to $10 billion in annual revenue.
Survey respondents also itemized potential headwinds they might encounter this year:
- Macroeconomic factors—50%
- Increased competition—49%
- Maximizing efficiency & ROI—48%
- Producing enough creative—48%
- Measurement and attribution—47%
- Managing a growing number of channels and platforms—38%
- Privacy/targeting changes—37%
- Securing sufficient budget—35%
- Ensuring they have tools needed to reach goals—29%
- Lack of talent/need to expand teams through hiring—11%