Compared to traditional marketing, online marketing provides advertisers with a data-driven PPC report that helps them formulate a plan & strategy for the best advertising results. With the increase in the number of online users, there has been a drastic increase in the number of online platforms. Advertisers today run Google Ads, Microsoft Ads and also include social media marketing in their paid advertising campaigns like Facebook Ads, LinkedIn Ads, YouTube Ads, etc., to reach their target audience. It has led to increased digital ad spending globally, and the US is no exception. The US economy is up in the air and facing turmoil like rising interest rates, cross-border war, etc., which has lowered ad spending. However, with the prevailing situation, the report from Emarketer expects the US ad spend to be around $278.59 billion, a cut of $5 billion from original forecasts of $284.10 billion. In this blog, let us see what is in store for the US ad budget in 2023 & upcoming years and what advertisers need to do for the best advertising ROI.
What to expect for US digital ad spending in 2023?
There is a popular adage in the advertising industry “When times are good, you should advertise. When times are bad, you must advertise.” There have been talks on economic recession in the US market due to multiple reasons, which have led to a decrease in ad spending. When the last recession ended in 2008, ad spending in the US dropped by 13%. Many businesses took up their hands from online advertising and running paid ad campaigns because they fear losing their revenue. However, many proven studies point out why businesses must take advantage of a weaker economy and continue running their PPC ads.
Not all size businesses can continue running paid ad campaigns as they may have to pay the search engines or online platforms for every click received on their paid ads. So, it becomes quite challenging to make the most of their advertising budget, especially for small size businesses. The goals of different businesses when running PPC ad campaigns are different, like lead generation, building brand awareness, etc. So, in times of declining advertising budget, a proper PPC strategy needs to be formulated for the best results. To increase traffic on the landing page and ensure that the target user takes the desired action, marketers must focus on writing great ad copies, ad descriptions, etc., that grab the users' attention to make a click on the ad. A PPC company can be contacted for PPC management services so that the PPC experts can assist with the best methods to run ads like search ads, video ads, mobile ads, performance max campaigns, etc., for best results.
With the increase in advertising spending from the last economic recession, digital ad spending worldwide grew slowly to 8.6% in 2022. Accounting for a total of $567.49 billion. This year, the growth is predicted to rebound at 10.5%, and the spend is expected to reach $626.86 billion.
What factors affect ad spending?
1. Geopolitical instability - Many factors affect a country's ad spending, and geopolitical instability is an essential factor that affects ad spending. With the war between Russia and Ukraine, there has been political unrest among countries globally. The developed countries have been affected a lot as the currencies of these countries are mostly used in ad spending. The US advertising business is similar to this, and the amount spent on paid ad campaigns has been a downfall.
PPC in digital marketing plays a crucial role in generating leads, building brand awareness, form-fill-ups, increasing branded search traffic, etc. Organizations can use white label PPC outsourcing services to target the best audiences, work on bid adjustment, etc., and increase traffic to the landing page. So, it becomes quite crucial for businesses to run PPC ads so that none of the target audience is missed out. It must be ensured that the landing pages & images are optimized as they are the first point of contact that convey the business message increasing the chances of the visitor getting converted into a customer.
With paid ad campaigns, the advertisers run local services ads, video ads, etc., to reach the target audience. The advertisers also focus on running remarketing campaigns, holiday ads, etc., and focus on ad personalization to users that did not convert due to one reason or another. As the US is said to be the superpower, the geopolitical instability has impacted GDP growth, energy & supply, etc. It has affected both the global import & export business and local businesses. All these factors have contributed to a lowering in ad spend. However, in these drowning situations, businesses can maximize ad spend and revenue growth with a proper audience-targeting strategy. To maximize search marketing results, businesses can outsource PPC to India and hire the best SEM consultants to achieve the desired goals.
2. Evolving marketing trends - Another factor that affects ad spending is evolving marketing spending. In the digital marketing world, many changes keep evolving with the marketing trends. Any form of online marketing, be it email marketing, content marketing, running a PPC ad campaign, Facebook Ads, YouTube Ads, etc., involves multiple changes. Thus, advertisers must be updated with these trends to grab the target audience's attention by marking a click on the ad.
The advertisers may miss out on these pointers, which leads to lowering ad spend. The advertisers see that the allotted budget is not spending, not receiving desired impression share, reduced number of clicks, etc. It creates a state of confusion among them that if everything is fine, then the desired goals are not achieved. With the e-commerce PPC ads, it becomes even more crucial to target these trends in their ad copy and provide core products or services in sync with these trends. Even with SEO campaigns, it is essential to include the SEO trends in the marketing strategy so that the website ranking on the SERPs is not affected. It does not hamper the performance of the SEO metrics like organic traffic, click-through rate, page loading speed, keyword ranking, average page load times, etc. If optimizing paid ad campaigns is challenging, businesses can outsource PPC to India. The PPC experts conduct a PPC audit, perform market research to determine marketing trends, and then optimize the paid ad campaigns.
3. Impact of recession - The economy of a country can be affected anytime. It may be affected due to the demand & supply of the products or services being offered by a country. Many other factors can also lead to recession, which is listed below.
a. Sudden economic shock (oil & energy resources impact on US market due to war).
b. Technological development.
c. Imbalance between production and consumption.
d. Import value being higher than import.
While these factors may lead to an economic recession, it becomes even more important to keep an eye on other factors that affect the economy, like natural calamities, invasions from cross-border countries, etc. So this impacts the country's economy as the expenses are made on necessary things that primarily need to be focused on. It leads to a reduction in advertising spend. Even running holiday ads may not yield the desired results as the country's economy is not stable. So, why waste money when the users do not get converted? Moreso, businesses think there may be ineffective results from running paid ad campaigns as the users may not spend their money.
4. Global pandemic - The next essential point affecting the PPC ad performance in the PPC advertising world is the global pandemic. Due to atmospheric changes or experiments, endemic or pandemics disturb a particular place or country. These situations keep arising occasionally and are not in anyone's control. The recent example is the ‘Coronavirus disease’ that surprised the world as most countries had to enforce lockdown. However, in the realm of all these, digital marketing came to the forefront as many of the users looked for products or services online. Digital marketing at the time of the Coronavirus played a crucial role as it was the best method to deliver the desired message to the users.
With such a wide effect of the pandemic, although there was a rise in the number of users switching to online marketing, not all get converted. This leads to a lowering of the advertising budget. Many of the users delay not availing of the products or services at the time of the pandemic. The physical products(other than medical products & necessities) delivery supply is reduced, so businesses think there is no point in running paid campaigns, which reduces ad spend.
US digital ad spending
According to Insider Intelligence, digital ad spending is expected to grow 10.5% in 2023 from 8.6% in 2022. These reflect downward revisions of 2.6% and 7%, respectively. In the upcoming years, it is expected to grow in terms of revenue as more advertisers are using paid ad campaigns in their digital advertising strategy.
Despite the downfall in advertising spend, the US advertising market is expected to grow by 5.9% in 2023. It is lower than the 9% growth seen in 2022. This data reflects that the desired advertising goals can be achieved by avoiding the PPC myths.
Businesses run many types of ad campaigns to reach their potential customers, like search ads, video ads, banner ads, etc. Businesses today can have a data-driven PPC report to clearly understand the essential PPC metrics that need to be optimized to increase the conversion rate. Be it any form of digital marketing like search engine optimization techniques, email marketing, content marketing, etc., it is quite vital to focus on gaining users' trust. It helps to boost brand awareness and drive quality traffic to the landing page. Similarly, with the PPC ads, advertisers need to dwell on performing a complete PPC audit to improve the performance of the PPC campaigns.
Search ad spending
Search ad campaigns are paid ads used by businesses to reach the target audience that is looking for products or services. To attract the users by making them click on these PPC ads, enticing ad copies, product descriptions, etc., are written to grab their attention. The more engaging & presentable the ad, the higher the chances of the users clicking on them.
Despite all the consequences, the forecast for search ad spending, like the global pandemic, cross-border disputes, etc., is expected to scale. In the US market, businesses run search ads to grab users' attention to their products or services. The search ad spending in the US market in 2019 was $ 55.17 billion. In 2023, it is expected to be $ 86.08 billion.
Display ad spending
Display advertising is a type of PPC ad that may include text, images, and videos to attract the audience to the landing page. The display ads can be run on any social media platform, Google Display Networks, or other digital platforms to increase traffic to the webpage.
As in SEO campaigns, you focus on optimizing images, improving page loading speed, increasing average time on the page, etc., to achieve website conversion goals. When running display ads, it is quite essential to optimize that the PPC specialists perform competitor analysis and conduct proper keyword research before implementing the ads. Similarly, businesses need to optimize the display ads in sync with the latest PPC trends to increase the number of ad clicks. White-label PPC outsourcing services are the best to run display ads as it helps companies focus on the core business while the SEM agency manages the optimization process.
Display ads are run by businesses so that businesses can target more number of users with high chances of taking the desired action. The user behaviour can be determined and the ad campaigns can be made accordingly that entice the target audience into making a click on the ad.
Social media: need of the hour for US ad spend in 2023
Any business today emphasizes running social media marketing campaigns. Whether it is running SEO campaigns or paid ad campaigns, social media is a requisite that businesses need to focus on today. Social media campaigns need to focus on personalization to engage the target audience with the content.
The paid ad campaigns in social media marketing include running Facebook Ads, LinkedIn Ads, YouTube Ads, Instagram Ads, etc. These ads focus must be ensured to be engaging and grab the users' attention. As in search engine optimization, the focus is on writing engaging social media posts. Similarly, writing great content for ad copies that grab users' attention is crucial. As Facebook is used mostly by friends & family, LinkedIn by corporates, c-level executives, etc. It can be achieved by touching unique selling points of users. So, once the users are satisfied with the product or services offered, they are highly likely to refer it to their near & dear ones, which helps in peer-to-peer marketing.
For the US market, the chart below depicts the %change expected to grow in 2023 to 34.4% compared to 33.7% in 2022. So, this data indicates the rise in social video ad spending, demonstrating the increase in the social media campaigns used by businesses.
Reasons to use paid ad campaigns
a. Budget flexibility - The essential benefit of using paid ad campaigns is that it provides budget flexibility. Online advertisers use paid ad campaigns as it helps them work on bid adjustment. The ad budget can be set to automated bidding and manual bidding, depending on what the business wants to deal with.
Budget flexibility is a crucial factor in paid ad campaigns as it can be changed per the business requirements. With a proper bidding strategy, businesses can maximize the advertising ROI, and this prevents the ad budget from draining. Audience targeting, demographic targeting, etc., helps to change the bid price depending on the users that they wish to target. With the increase in the number of users, it is also crucial that the ads are optimized for mobile devices.
b. Targeting options - The essential benefit of running paid ad is that it provides exact targeting options. With such a wide range of audiences on search engines and online platforms, it is crucial to get in touch with the relevant audience with a high chance of taking the intended action.
The more relevant the user reaches the landing page, the higher the chances of them taking the intended action. With paid ad campaigns, keyword research can be done to choose the relevant keywords for your ad campaign. The exact match keywords, phrase match keywords, and broad match keywords can be chosen that match the search query of the target audience. Negative keywords can also be added to the search terms that trigger the ad from appearing to irrelevant search queries.
c. Insights into marketing data - The paid ad campaigns help gain insights into marketing data. The more businesses understand their users, the better they can optimize the PPC ads to improve the performance of the essential PPC metrics.
To track paid ad campaign performance, Google Ads can be linked with Google Analytics. The details of the essential KPIs can be determined using these PPC tools. It helps gain insight into marketing data based on which essential advertising decisions can be made. This data helps to stay ahead of the competitors and also formulate the best strategies to increase online sales.
Bottom line
Ad spend forecasts are essential for businesses that help them plan their strategy for the future. Marketing trends keep evolving, and there is no one-size-fits-all plan in the online advertising world. However, to maximize the results with PPC in digital marketing, white label PPC outsourcing services can be availed to help achieve the desired results.
The forecasting is based on user behavior and depends on the products or services the business offers. Along with running PPC ad campaigns, companies must also focus on core business to provide users with the best products or services. The more satisfied the users, the more the increase in traffic on the landing page. It encourages running more paid ads and offers discounts & offers to users. These can also be added in the ad extensions like promotion extensions, sitelink extensions, etc. In the US market, the ad forecast is on the lower side, but there are chances of improvement in the factors affecting ad spend. This would help increase the ad spend, and the final data at the end of 2023 may be greater than the forecast. A digital marketing company can be contacted to gain the best results from paid ads, as offshore PPC experts have expertise in managing ad campaigns and providing the best advertising ROI.
References:
• What’s in store for ad spend in 2023
• Ad budgets set to slow even more in 2023