According to the latest data from Winterberry Group, the total US media spend reached $277.3 billion in 2022. It was 13.5% more than its previous year. The expected year-over-year growth of 2022 was more, but it turned out to be 16.5% below the estimation. It indicates that there has been a slight decline in digital media spending in 2022. Despite that, online marketing spend was calculated to be around 57.7% of the total $480.8 billion. It was more than a 55.6% share in 2021. So this year, the marketing spend is expected to increase by 10.8%, while its share might rise to 60.5% (share of the total $509.2 billion).
Here is a deep analysis of the outlook for 2023 to separately look at the spending on each channel.
The spending on search has been consistent in the past few years. It had a significant share in US online media spending in 2022. The total spend of this channel in 2021 was $98.4 billion, which was already 16.1% more than its previous year. Now, the search growth will slow down by 9.3% this year. At the same time, the total amount spent will exceed $100 billion. It will go around $107.6 billion, more than the one spent on two significant offline spending categories (linear TV and direct mail).
Paid social is another big channel that is still at the top second position in terms of online media spending in 2022. It showed exceptional growth of 33.3% a year before 2022, then a pretty slow growth of just 2.4% (equivalent to $60 billion).
This year, the growth of paid social is expected to recover. The growth rate of paid social is predicted to be 6.8% in 2023. However, the difference between paid social and search growth rates will remain huge because of paid social’s slowest growth rate in previous years. The retail sector, which is one most prominent and fastest-growing spenders on US advertising, might shift the investment from social to search.
The growth of digital media continues at a steady pace. In 2022, it showed an above-average growth rate of 17.5% ($47 billion). It is expected to retain the double-digit growth rate in 2023 as well. The growth rate increase might be 14.3% ($53.7).
Connected TV is another important channel that experienced the fastest growth rate of 46.5% and reached $21.2 billion. The reason for this notable increase in growth includes new advertising options and the escalation of OTT viewing. The factor of cookie depreciation also played a role in it.
CTV is expected to show the fastest growth rate again this year. However, it might be less than before. The growth rate of Connected TV will rise by 27.2% ($26.9 billion in total). This way, digital media spending on CTV will become half the size of the investment that goes into linear TV ad spend ($56.9 billion in total).
Display ad refers to banner ads that mainly appear on the desktop. Last year, its growth rate increased to 6.5%, below average, which made the total digital media spend $15.4 billion. However, the digital media spend is expected to increase rapidly by 8% in 2023. This way, it will reach $16.6 billion. However, that will slow down the overall online average.
Digital Audio (Podcasts, Radio)
The growth rate of digital audio was slower, interestingly, than the average last year. While the online media average rate was 13.5%, digital audio was 9.3%. That is worth mentioning because digital audio has rapidly become popular in recent years. However, the growth rate of 9.3% made the channel reach a total digital media spend of $6.1 billion, while email/SMS had a total spend of $6 billion.
This year, the expected growth rate of digital audio is 9.8%, equivalent to a total spend of $6.7 billion. It’s closer to the overall average growth rate of digital channels, estimated to be around 10.8%.
Last year, email/SMS showed a below-average digital media spending growth rate. It was recorded as 5.7% ($6.0 billion digital media spend). However, this channel’s growth is expected to decrease further this year. However, the overall spend on email/SMS will increase by 1.3%, equivalent to $6.1 billion. It makes email/SMS the second slowest channel compared to other online media.
The digital media spend on the influencer category boosted by 27.9% in 2022. It is the second fastest growth rate among online media, making influencer channel investments reach $5.9 billion. This way, it has become a competitive channel expected to surpass email/SMS. It will also overcome the spending on video game advertising. In 2023, the influencer channel will show the second fastest growth rate by 17.5%, while the total spending will reach $6.9 billion. It will quickly excel email/SMS and digital audio spending in the process.
Video Game Advertising
In the USA, video games are popular among youth, although the ad spending on this channel is just a tiny fragment of the total online media spend. Last year, the growth rate was 4% ($5.2 billion total spend). This year, the investment in video games will bounce back to double digits. The growth rate is expected to be 10%, while the total spending will reach $5.8 billion.
B2C Lead Generation
According to Winterberry Group’s analysis, B2C lead generation experienced a muted growth rate of 3.9%, which made the total online media spend on the channel $4.8 billion. The channel’s overall analysis shows that it will be worse this year. It will only increase at the rate of 0.9%, which is the lowest growth rate among other online media channels.
Affiliate Network Fees
Last year, the growth rate of affiliate network fees, excluding the cost of media and platforms, increased by 9.4% ($3.8 billion digital media spend). This year, it will show a similar growth rate of 9.9%, and the spending will reach $4.1 billion.
The out-of-home digital advertising channel has restored itself after the pandemic. Last year, it showed a growth rate of 15% and reached $3.6 billion. This year, the growth will increase but at a below-average pace. It will show a growth rate of 10% to reach $3.9 billion.