2023 Outlook Survey

Ad Spend, Opportunities, and

Strategies for Growth

November 2022
Table of Contents
• Objective 3
• Methodology & Respondent Profile 4
• Executive Summary 5
• 2023 Outlook: Ad Spend 7
• 2023 Outlook: Opportunities and Strategies for Growth 13
• Deep Dive: Retail Media Networks 18
• Deep Dive: Metaverse 23

IAB Proprietary Research 2

Objective

This study was conducted by IAB to provide the digital ad-supported ecosystem with a forward-looking
view into the 2023 ad spending marketplace (including both spend levels and strategies) being projected
by buy-side ad investment decision-makers, primarily at brands and agencies.

This study includes:

• A view into overall spend as well as at the channel and category levels
• A perspective on opportunities and strategies for growth
• Insights into two key, growing spaces: Retail media networks (RMNs) and emerging technology (e.g.,
metaverse, non-fungible tokens (NFTs), augmented reality (AR), etc.)

The results are designed to help both the buy-and sell-sides:

• Plan for the year ahead
• Benchmark competitive positioning/strategy in the marketplace
• Identify white space, channels, opportunities, and brainstorm ideas for launching new products and
services, finding new targets, and growing ROI

IAB Proprietary Research 3

Methodology & Respondent Profile

Email survey sent to buy-side ad investment decision-makers, primarily at brands and agencies
Field dates: 10/18/22 - 11/7/22
n=223

Company Type Job Title

75%
42% Brands Director+ (e.g., C-level,
SVP, VP, etc.)

Agencies
Manager (e.g., Planner,
Buyer, Strategist, etc.)
42% Other (e.g.,
Marcomm, 2% Junior (e.g, Analyst,
16% Consultancies)
23% Planning Assistant, etc.)

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Executive Summary (1 of 2)

2023 Outlook: Ad Spend

• 2023 overall ad spend is projected to be up 5.9% YoY
• Although most categories are projecting ad spend growth in 2023, the growth will not be uniform:
• B2B (+20.8%), travel (+20.6%), restaurants/beer/liquor/wine (17.1%), and financial services (11.1%) are projected to
post double-digit growth YoY while other categories are projected to be down, flat, or post single-digit growth
• Led by CTV (+14.4%), every digital channel is projected to see ad spend growth in 2023 while traditional channels
will decline YoY

2023 Outlook: Opportunities and Strategies for Growth

• Customer acquisition is by far buyers’ top goal for 2023 media investments (61%), followed by increasing brand equity
(43%) and improving media efficiency (35%)
• More than half of buyers (52-55%) expect to focus more time and resources on measurement, marketing mix and
modeling (MMM), 1st party data, and creators in 2023
• Over 6-in-10 buyers (63%) will more frequently reforecast media plans in 2023, most of whom will do so at least monthly

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Executive Summary (2 of 2)

Deep Dive: Retail Media Networks (RMNs)

• 6-in-10 buyers (61%) are investing or considering investing in RMN advertising
• Among those currently investing:
• 2023 RMN ad spend is projected to be up 28.4% YoY
• RMN ad investment is spread across multiple partner types, which includes aggregated marketplaces (82%),
retailer owned (75%), and e-commerce owned (64%)
• Onsite (owned & operated) ad investment is by far the top RMN ad tactic being leveraged (by 91% of RMN buyers)

Deep Dive: Metaverse

• More than half of buyers (56%) are investing or considering investing in metaverse advertising/marketing
• Buyers’ top reasons for metaverse advertising investment are building brand awareness (52%), engaging existing
customers in a new way (48%), boosting brand perception (46%), and reaching hard-to-find audiences (42%)
• Buyers not investing in metaverse advertising cite multiple reasons for their lack of investment, including the nascency
of the space (41%) and it not being a good fit for their audiences (37%) and brands (35%)

IAB Proprietary Research 6

2023 Outlook:
Ad Spend

7
Buyers project 2023 overall ad spend to be up +5.9% YoY

% Change
2023 vs. 2022:

+5%
+5.9%

n=210
Q: Provide your best estimate for the following: budget percent +/- for projected 2023 total media ad spend vs. actual 2022 total media ad spend.
IAB Proprietary Research 8
Buyer projections for ad spend growth have decelerated

% Change Ad Spend YoY

9.0%

5.9%

2022 2023

n=210, IAB 2H 2022 Flash Bulletin, n=250

Q: Provide your estimated percent change (+/-) in total projected U.S. media spend for full year 2022 (Jan.-Dec.) vs. the actual spend for full year 2021.
Q: Provide your best estimate for the following: budget percent +/- for projected 2023 total media ad spend vs. actual 2022 total media ad spend. IAB Proprietary Research 9
Category ad spend growth will vary across industries in 2023

B2B, travel, restaurants/

beer/liquor/wine, and financial % Change Projected 2023 Ad Spend vs. 2022, by Category
For directional use only due to lower sample size
services are projected to post
double-digit growth YoY while other
categories are projected to be down, B2B 20.8%
flat, or post single-digit growth. Travel 20.6%
Restaurants/Beer/Liquor/Wine 17.1%
Financial Services 11.1%
Technology/Telecommunications 6.4%
Retail 4.8%
CPG 4.7%
Health/Wellness 2.3%
Apparel/Fashion/Luxury 0.2%
Auto -7.0%

n=floating base
Q: Provide your best estimate for the following: budget percent +/- for projected 2023 total media ad spend vs. actual 2022 total media ad spend.
Note: Other categories (including Home/Appliance and Media/Entertainment) are not listed as reliable sample was not achieved. IAB Proprietary Research 10
Every digital channel is projected to post ad spend growth in 2023; traditional to decline

% Change Projected 2023 Ad Spend vs. 2022, by Channel

CTV 14.4%
Paid Search (SEM) 8.9%
Podcasts 8.1%
Digital Video (excl. CTV) 6.5%
Social Media 6.5%
Digital Audio (excl. Podcasts) 5.9%
Digital Out-of-Home (DOOH) 2.7%
Digital Display 2.1%
Gaming 1.6%
Other Traditional Media (Radio, Print, OOH, Direct Mail) -4.1%
Linear TV (Broadcast and Cable) -6.3%

n=floating base
Q: Provide your best estimate for the following: budget percent +/- for projected 2023 total media ad spend vs. actual 2022 total media ad spend by CHANNEL.
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Digital video (incl. CTV) will continue to capture the greatest % share in 2023

Ad Spend % Share by Channel – 2023 vs. 2022

19.3% 22.4% Digital Video (incl. CTV)

13.7%
16.0% Paid Search (SEM)

16.6%
15.9% Social Media

16.4% Digital Display

13.1%
Digital Out-of-Home (DOOH)
3.4% 3.8%
3.8% Podcasts
3.7%
4.5% 3.1% Digital Audio (excl. Podcasts)
1.4% Gaming
13.3% 14.0% Linear TV (Broadcast and Cable)

8.9% 6.7% Other Traditional Media (Radio, Print, OOH, Direct Mail)
2022 2023

n=120, IAB 2021 Fall Impact Study, n=470

Q: Provide your best estimate for your budget PERCENT SHARE by CHANNEL for projected 2023 media ad spend.
Q: Please identify the estimated percent share of your 2022 media budget by CHANNEL. IAB Proprietary Research 12
2023 Outlook:
Opportunities and
Strategies for Growth

13
Customer acquisition is by far buyers’ top goal for 2023 media investments

More than 1/3 of buyers also

Top 3 Goals for 2023 Media Investments
cite increasing brand equity
and improving media
efficiency as top goals for Acquire new customers 61%
2023 media investments. Increase brand equity 43%
Improve media efficiency 35%
Optimize reach and frequency 26%
Drive repeat purchases among existing customers 25%
Leverage data to drive precision and effectiveness 22%
Improve marketing mix modeling results 19%
Explore new advertising KPIs 16%
Increase share of voice 14%
Increase focus on sustainability/reducing carbon footprint 9%
Increase minority-owned and/or content-focused media 8%
Get guarantees based on business outcomes 6%
Reduce reliance on legacy metrics and currencies 4%

n=223
Q: What are your top three goals for your 2023 media investments?
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Measurement, 1st party data, and leveraging creators will be the greatest focus areas

Nearly 1/3 to almost 1/2 of Level of Focus in 2023

buyers will also focus more Cross-platform measurement 55% 32% 8% 5%
on shoppable ads, retail Ad placement with publishers with 1P data 53% 34% 4% 9%
media network (RMN) ads,
1P data acquisition/partnerships 52% 34% 2% 12%
and data clean rooms.
Creator/influencer ads/partnerships 52% 25% 9% 14%
Marketing mix modeling (MMM) 52% 30% 6% 12%
Attribution modeling 46% 33% 7% 14%
Contextual ads 46% 37% 6% 11%
Shoppable ads 43% 27% 7% 23%
Attention metrics 36% 35% 5% 24%
Retail Media Network ads 30% 28% 11% 31%
Data clean rooms 29% 35% 6% 30%
Web3 (including metaverse, NFTs, etc.) 26% 26% 12% 36%
Cohort-based ads 20% 37% 6% 37%
In-game ads 19% 29% 10% 42%
Augmented Reality (AR) ads 18% 37% 9% 36%

Focus Significantly/Somewhat More Focus the Same Focus Significantly/Somewhat Less N/A

n=223
Q: Do you expect to FOCUS more, less, or the same amount of time and/or resources in 2023 (vs. 2022) on the following?
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In times of economic uncertainty, media budgets get evaluated much more frequently

% Approaching 2023 Media Planning Differently Due to Marketplace Dynamism

Yes, we are evaluating and reforecasting more frequently 63%

Yes, we now have a contingency plan 19%

Yes, we are no longer budgeting for the long term 13%

No, things are being handled as normal 23%

n=223
Q: Given the marketplace dynamism, are you approaching 2023 media ad spend planning differently than you normally would?
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Of those reforecasting more frequently, most will do so at least monthly

Frequency of Adjusting 2023 Media Plans

Among those evaluating and reforecasting 2023 media ad spend more frequently as
a result of changing marketplace dynamics

1%

6%
Daily
14%
34% Weekly

Monthly

Quarterly

Biannually
45%

n=140, Among those evaluating and reforecasting 2023 media ad spend more frequently as a result of changing marketplace dynamics
Q: You indicated that you are evaluating and reforecasting 2023 media ad spend more frequently as a result of changing marketplace dynamics. How frequently are
you adjusting your plans? IAB Proprietary Research 17
Deep Dive:
Retail Media Networks
(RMN)

18
6-in-10 buyers are currently/considering investing in RMN advertising

Current Investment in RMN Advertising

25%

39% Yes

No, Considering

No, Not Considering

36%

n=223
Q: Are you currently investing in RETAIL MEDIA NETWORK advertising?
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Buyers project 2023 RMN ad spend to be up 28.4% YoY

RMN Ad Spend
% Change

+5% 2023 vs. 2022:

+28.4%
n=56, Among those currently investing in RMN advertising
Q: Provide your best estimate for the following: budget percent +/- for projected 2023 RETAIL MEDIA NETWORK ad spend vs. actual 2022 RETAIL MEDIA
NETWORK ad spend. IAB Proprietary Research 20
RMN ad investment is diverse: spread across multiple partner types

Types of RMN Ad Partners Being Leveraged

Among those currently investing in RMN advertising

Aggregated
Aggregated Marketplaces
Marketplaces (e.g.,
Criteo,Criteo,
(e.g., CitrusAd, PromoteIQ,
CitrusAd, Google,
PromoteIQ, 82% 13% 5%
The Tradeother
Desk,DSPs,
etc.) etc.)
Working With

Not Working With, But

Retailer Owned (e.g.,Owned
Retailer Kroger, Considering
Walmart,
(e.g., Kroger,Roundel,
Walmart,Sam’s Club,
Roundel, 75% 21% 4%
Not Working With, Not
Sam’s Amazon, etc.) etc.)
Club, Amazon, Considering or N/A

E-Commerce Owned
E-Commerce Owned (e.g.,
(e.g., Doordash, 64% 22% 14%
Doordash, Instacart,Instacart,
Uber Eats,Uber
etc.)
Eats, etc.)

n=56, Among those currently investing in RMN advertising

Q: What types of RETAIL MEDIA NETWORK ad partners are you working with?
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Onsite (O&O) ad investment is the leading RMN ad tactic being leveraged

Notably, 63-73% of
RMN buyers are Select Types of RMN Ad Tactics Being Leveraged
Among those currently investing in RMN advertising
running offsite tactics—
at least 15% more than
other ad tactics.
Onsite (Owned & Operated) 91% 7% 2%

Running

Offsite Display (Direct Buys, Banner) 73% 22% 5%

Not Running, But
Considering
Offsite Video (CTV, OLV) 63% 32% 5%
Not Running, Not
Considering or N/A

Retailers’ email/newsletter 48% 23% 29%

In-store DOOH 46% 31% 23%

n=56, Among those currently investing in RMN advertising

Q: What types of RETAIL MEDIA NETWORK ad tactics are you running?
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Deep Dive:
Metaverse

23
The metaverse is gaining attention from advertisers

Current Investment in Metaverse Advertising / Marketing

Metaverse definition: virtual, internet-

based experiences that bridge offline 20%
and online worlds, where people can
customize avatars, play games, shop,
interact and virtually attend live events Yes
44% No, Considering
No, Not Considering

36%

n=223
Q: Are you currently investing in METAVERSE advertising and/or marketing?
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Early stage metaverse tactics are focused on upper funnel metrics

Boosting brand awareness Reasons for Investing in Metaverse Advertising / Marketing

and perception as well as Among those currently investing/considering investing in metaverse advertising / marketing
engaging customers in a
new way are top reasons Build brand awareness/recognition 52%
for metaverse advertising
investment. New way of engaging existing customers 48%

Boost brand perception 46%

Reach audiences not found/hard to find elsewhere 42%

Provides an additional e-commerce channel 34%

It’s a good fit for our audience 28%

It’s a good fit for our brand 27%

Drive customer loyalty 21%

n=124, Among those currently investing/considering investing in metaverse advertising / marketing

Q: You indicated that you are currently investing or considering investing in metaverse advertising and/or marketing. Please select all of the reasons why below.
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Not everyone is ready to jump into the metaverse yet

Those not investing in the Reasons for NOT Investing in Metaverse Advertising / Marketing
metaverse cite the nascency Among those not currently investing/considering investing in metaverse advertising / marketing
of the channel, lack of fit,
budgeting constraints, and Metaverse advertising is too nascent 41%
unclear ROI as reasons for
not investing in advertising.
It’s not a good fit for our audience 37%

It’s not a good fit for our brand 35%

We don’t have room in our budget 35%

We have yet to develop a metaverse advertising strategy 34%

Ability to deliver ROI/business objectives is unclear 32%

Lack of industry standards 20%

n=99, Among those not currently investing/considering investing in metaverse advertising / marketing
Q: You indicated that you are not currently investing or considering investing in metaverse advertising and/or marketing. Please select all of the reasons why below.
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Thank You!
For further information:

• Chris Bruderle (chris@iab.com)

• Meredith Guiness (meredith@iab.com)
About IAB

The Interactive Advertising Bureau empowers the media and marketing industries to thrive in
the digital economy. Its membership comprises more than 700 leading media companies,
brands, agencies, and the technology firms responsible for selling, delivering, and optimizing
digital ad marketing campaigns. The trade group fields critical research on interactive
advertising, while also educating brands, agencies, and the wider business community on the
importance of digital marketing. In affiliation with the IAB Tech Lab, IAB develops technical
standards and solutions. IAB is committed to professional development and elevating the
knowledge, skills, expertise, and diversity of the workforce across the industry. Through the
work of its public policy office in Washington, D.C., the trade association advocates for its
members and promotes the value of the interactive advertising industry to legislators and
policymakers. Founded in 1996, IAB is headquartered in New York City.

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