The Year Ahead: Spending Down, CPMs Down, Budgets (For Those Spending) Up

With 2023 upon us, marketers in the US are looking at a mixed bag. With a possible recession on the horizon, marketers are watching every marketing dollar they spend. In the weeks ahead, many marketers will either cut ad spending indiscriminately or cut ad spending where the return is inefficient. Regardless of how they do it, months of ‘belt-tightening’ has already begun — and the belt tightening will be with us through the first two quarters of the year, at least. As a result, ad spending will be down considerably through July, 2023.

What’s more, with reduced spending (and less demand for ad inventory), the market will realize reduced CPMs in many of the ad market’s most popular tactics, including Connected TV and Streaming Audio. The reduction in CPMs will be most obvious on the programmatic side of the ecosystem where things tend to turn on a dime, but aggressive pricing will be everywhere. In the months ahead, media companies will be doing everything they can to monetize their ad inventory, including aggressive direct sales programs and performance marketing opportunities.

Finally, smart marketers will seize the ad opportunity in the first half of 2023… and will be increasing their advertising budgets to capitalize on the facts that (1) their competitors have buried their wallets deep in their pockets and (2) there is great ad inventory available at deeply discounted rates. As early as this week, smart marketers can, and may, begin ‘stealing’ marketshare from many of their competitors in a most efficient and effective manner.

There will be a host of other emerging trends in the year ahead and most of them will be grounded in advertising technology. Innovations associated with Streaming Video and Streaming Audio will be plentiful and the effects those innovations have on social and display advertising, not to mention other media, will be significant. Below is a list of some of the other things we see coming our way in 2023…

• Connected TV will have another banner year in 2023, as it becomes the TV viewing preference of most households in the US. Research suggests that more than 40 Percent of adults watch streaming video content daily and over 60 Percent watch streaming video content weekly. With more viewers streaming more programming than ever — and with TV networks including CTV in annual upfront packages — CTV will continue to grow as the platform is embraced by viewers, networks and advertisers alike.

• Streaming Audio will continue to flex its muscles in 2023, as streamers like Spotify, Apple, Amazon, Pandora, and countless others, continue to broaden the audience, with nearly 200 million Americans streaming music, radio, news and podcasts each month. The podcast category, with nearly 1,000,000 active podcasts and nearly 50,000,000 total episodes, is attracting 22 Percent more listeners year over year, and that is the primary reason the Streaming Audio market will continue to realize significant growth in 2023.

• Multichannel and omnichannel marketing will become more important in 2023, as marketers join new marketing and advertising channels — including Connected TV and Streaming Audio — with more traditional digital channels like social and display. Marketers will do more with 1st party data than they have previously. They will also consider leveraging new ‘identifier’ tech from third parties, like LiveRamp, so that multichannel and omnichannel marketing can flourish. The ‘household’ graph will become commonplace in 2023 and it will be driven by this type of technology.

R2 Media has made a significant financial investment over the last 18 months in both its technologies and processes. As a result, we are bringing a refined-approach to ad delivery and targeting across the evolving media landscape. Today, we do more with 1st party data than ever before.

R2 Media also has its own household graph, which enables us to reach multiple people inside a home on multiple devices, including TVs, laptops and computers, mobile devices, even smart speakers. The R2 Media household graph enables us to measure reach and frequency across platform and across device. And we do it efficiently and effectively!

Here’s to a Happy, Healthy and Prosperous 2023.