U.S. digital ad spend is only expected to increase by 7.8% in 2023, a drop from 10% growth for the first time in 14 years, according to a new forecast from eMarketer. It is projected to rebound to 11.2% growth in 2024, the forecast said. Digital media is expected to make up 74.6% of total U.S. media spend, which is expected to reach nearly $264 billion in 2023. Connected TV (CTV) advertising is charging ahead and is projected to hit $25 billion in 2023, accounting for 9.5% of total digital ad revenue. Paid search represents 41.8% of total digital spending and is expected to reach $110 billion this year. Retail media networks (RMNs) are also a rising star, with 18.7% growth in retail media search and digital ad revenue projected to rise from $31 billion in 2021 to $45 billion this year.
It appears that following the dramatic rebound in 2021, digital ad spend is slowing down. This is despite outliers like CTV and RMNs, which prove that brands need to meet customers where they are. With TV watchers cutting the cord and shifting to streaming services, and RMNs providing new opportunities to get closer to customers when they shop, brands need to shift their budgets accordingly. Ultimately, the long-term view is that digital advertisers are pumping the brakes following a remarkable rebound in 2021, with a more modest rebound predicted for 2024.
Originally reported by Martech: https://martech.org/digital-ad-spend-growth-drops-to-7-8-this-year/
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