What will be the biggest change to impact global marketing 2023?
Updated: Oct 25
When discussing digital marketing for small businesses in 2023, the topic on everyone's mind is the loss of third-party cookies. While this change poses a considerable obstacle for marketers, it's a problem the industry has known was coming since it was announced in 2020. I believe when focused on 2023, the severity and immediacy of the cost of living crisis will have the biggest impact on marketing, and businesses in Buckinghamshire and beyond should take note.
This year the IMF stated, "Global growth is projected to slow from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. It also forecasts global inflation to hit 7.4% in 2022 and remain at 4.85% in 2023".
This news should concern marketers because "ad agency revenue growth is historically a lagging indicator for GDP – meaning that any change in economic growth hits agencies a few quarters later." (Scott, 2019). When asked about the impact of an economic recession on marketing strategy, a recent survey of marketers found that 49% of surveyed anticipated a significant impact, and 43% anticipated at least some impact (WARC. 2022)
If agency revenue growth slows, it could impact media planning budgets directly. Global advertising expenditure growth is forecast to drop from 9.2% to 8.0% in 2022 and 5.4% in 2023. (Zenith Media, 2022) also, the 2022 WARC Global Marketing Index released in May, shows a fall in global marketing budgets from 65.3% in August 2021 to 57.2% this May. A fall in marketing spending correlates with previous recessions like 2008, which saw "the entire ad market decline by 13%." (Scott, 2019).
The cost of living crisis could also impact consumer behaviour and buying decisions. "Thriftiness is back with a bang, as consumer optimism gives way to worry" (GWI, 2022). "If consumer behaviour changes, brands need to pivot their messaging," says Louise Martell, CSO of Yonder media. She recommends "dialling down high aspiration and dialling up family, friends and home centricity, and experiences over acquisition. (WARC Talks, 2022)
When brand messaging needs to pivot during a crisis, marketers must adjust their strategy too. During the covid epidemic, eBay focused on empathy and understanding of the small business using its platform, not eBay itself. This strategy required a creative switch to mass media and partnerships (Jordon, 2020).
But can a comparison be made with eBay's 2020 strategy? Inflation is currently double what it was during the peak of covid, and we are now dealing with what Ananda Roy calls the "perfect storm of high inflation and supply chain problems."
Another consideration is that eBay successfully leveraged cheaper media platforms at a discounted rate. In contrast, global media planning costs are forecast to rise over the next 12 months, with TV advertising up 11-13%, Online videos up 7%, OOH and radio up 4%, Social media and digital display up 3%, while print will remain stable (Zenith Media, 2022)
The disparity between economies and demographics further complicates the situation. "Of the 42 big economies featured in the indicators page of The Economist, eight still have inflation below 4%." (Economist, 2022.) Media planners would be wise to consider this at the early stages of planning. "Localization must be considered early in any content development strategy. This means shortlisting target markets for localised content at the conception stage of a global content campaign, as well as developing regionally nuanced campaigns that go beyond translation add-ons. People in different countries, age groups, and income levels will feel the strain in different ways, some more severely than others" (GWI, 2022)
As most economic data is forecast, it’s difficult to know exactly what the situation will be in 2023. I argue that the extra cost of planning for a challenging financial year that turns that doesn’t turn out to be as severe will be far less than doing nothing and having the forecast proved correct. Peter Field advises, “It is better to maintain SOV (share of voice) at or above SOM (share of market) during a downturn: the longer-term improvement in profitability is likely to greatly outweigh the short-term reduction”.
As the old adage goes, "When times are good, you should advertise. When times are bad, you must advertise.".
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