Will APAC brands reduce their media budget in 2023?
Around 29.3% of brands globally plan to cut their media budgets next year, with the same number saying they will invest more in 2023. Four in 10 brands globally will maintain their budgets at 2022 levels. regionally, only 14.7% of brands in APAC said they would cut their media budget while 50% said they would maintain the 2022 budget in the new year. Just over a third (35%) of the APAC region plan to increase their media budget slightly for 2023.
In contrast, a third of respondents in EMEA agree that there could be a significant (more than 10%) or slight (0% to 10%) decrease in media budget next year, compared to 30% who expect a slight increase in expenditure. . These statistics are in line with a new study by the World Federation of Advertisers (WFA) and Ebiquity which assessed the intentions of 43 multinational companies. The sample included five of the world’s 10 largest advertisers by spend, who collectively invest more than US$44 billion in advertising.
According to the study, 74% of respondents “strongly agree” or “agree” that 2023 budgets are impacted by the recession, with marketers needing to justify the investment. Only 2% strongly disagree while 17% remained neutral. The Big Behavioral Change In the study, there is a different focus on how money will be allocated next year, with more emphasis on short-term performance marketing. In fact, 28% will be looking to improve performance, compared to 21% who are focused on increasing brand spend in 2023.
Digital media is expected to see an increase in investment, with 42.0% of respondents indicating that they will increase their spending slightly or significantly. The digital channel expected to see a significant increase in investment is CTV (67%), followed by paid social media (52%) and retail media (51%). On the other hand, offline media such as TV, radio, print and outdoor are expected to suffer, with 48.8% of respondents planning to reduce their offline investments and a quarter planning to significantly reduce their investments. (by more than 10%). printing expenses.
The study also revealed greater flexibility in investing, as 40% of respondents will increase their share of flexible/bidding purchases next year. Meanwhile, 51% will maintain the 2022 mix. According to WFA and Ebiquity, this strategy allows brands to hold back funds, should economic conditions require it. Less than one in 10 respondents (9%) plan to increase the proportion of the budget allocated to initial commitments.
WFA CEO Stephan Loerke said it’s encouraging to see a number of clients plan to hold firm and heed lessons well learned from previous recessions, which show time and time again that those who continue to ‘invest or increase their advertising spend emerge. stronger after periods of economic uncertainty.
Meanwhile, Ebiquity CEO Nick Waters said with brands required to do more with less next year to maximize the value of their investments, it makes sense to review spending and cut back first. inefficient and unnecessary spending. “Sustaining investment is one thing, but there is a risk to long-term brand health in investing too much at the bottom of the purchase funnel. It is a natural instinct to want to see immediate results from investment in media, but the longer-term trade needs to be weighed carefully. It becomes more expensive to rebuild brand credentials once they have slipped,” Waters added.
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