With Advertising Trends, Age Might Not Be Just a Number

5 Min Read

The wrappers from this year’s Halloween candy may still be on your kitchen counter, but November 1st brings a major shift — the 2023 holiday season is upon us… in the advertising world, at least.

Mariah Carey and hot cocoa aren’t the only things making their annual comeback. As we enter the final two months of 2023 (we know, we’re not sure where the time went, either) we’re also getting a new round of data that paints a picture about how the past two years have shaken out — and what it might mean for the years to come.

One such example: Ad Age’s new findings on the “World’s Largest Advertisers,” which outline trends from 2022 and 2023 and give marketers a lot to consider.

Ad Spend is Trending Upwards

2022 was unpredictable, to say the least. Yes, we’d made it out of the worst of the COVID-19 pandemic, but the year was rife with uncertainty. Consumers and advertisers alike were hit hard by an unstable job market, a vacillating economy, and high inflation.

This said, not all was doom and gloom — Ad Age’s analysis found that ad spend by major advertisers increased in 2022.

“The world’s 100 biggest advertisers nudged ad spending upward 2.3% in 2022, a modest boost but enough to reach a record $347 billion,” Ad Age reports. “Last year’s ad growth in a way marked a return to normal, matching the 2.3% average spending growth for the 100 biggest advertisers group for the five-year period of 2015-2019, before the start of the pandemic.”

Now, with 2023 coming to a close, advertising spend is continuing to trend in a positive direction — per eMarketer, September marked the third consecutive month of ad growth in the U.S.

But data can’t tell the whole story — not by itself. And as we wrap up this year and plan for next year, it’s important to evaluate how and why these advertising trends are changing.

Brands Act Their Age — And Advertising Trends Follow

Financial analyst Brian Wieser suggests that trends like those documented by Ad Age are heavily influenced by when those “biggest” companies are founded. And “creative destruction” — the idea that new innovations and practices displace the established and often outdated — is a key piece to this.

“A company who came into existence in 2022 will have a very different media mix than one who came into existence in 2012 or 2002 or any prior era, and those preferences or skews will generally hold for a long time – especially as media mixes can be directly tied to a business’ basic form,” Wieser writes. “I argue that related trends can be much more important than the shifts of media mixes that existing or incumbent advertisers have, where a percentage point or two of a budget allocation to a media type might shift every year.”

Comparing Ad Age’s “World’s Largest Advertisers” findings from 2022 and 2012, Wieser points out that many of the top advertisers on the list in 2012 were displaced by 2022. Some of the biggest advertisers in 2022 — Amazon, Expedia, and Netflix, to name a few — were much smaller back in 2012.

This is particularly relevant when it comes to advertising on linear television, a channel historically dominated by companies that have grown up with the medium (the Coca-Colas and P&Gs of the world). As more consumers cut cords, ad spend on digital channels — where this new generation of “big” companies feel right at home — could continue to displace traditional TV spend.

“Although many of these newer or newly large advertisers will include television as part of their media mix, it is likely to represent a much smaller share of spending than it was for advertisers who emerged in an earlier era,” Wieser writes. “Because their businesses are built around digital media, digital advertising — platforms in particular, given the benefits that follow from their scale — will always have a position of incumbency.”

With Streaming Ads, Brands Get TV Plus Performance

Newer businesses are indeed approaching their creative and marketing mix differently. Last December, Adweek reported that many relatively young, digitally native brands have turned to Connected TV (CTV) to produce meaningful results. Consumers may still be viewing these businesses’ ads on television screens, but the advertiser experience is markedly different than when using linear TV.

“A media plan that prioritizes CTV is becoming increasingly common for digitally native brands,” Catherine Perloff of Adweek writes. “A generation of direct-to-consumer companies built their businesses on social platforms, taking advantage of their ability to target the right consumers at a low cost. Now, as those platforms have been challenged by privacy changes and grow more expensive, scrappier upstarts are turning to CTV, sending ad spend soaring.”

This trend has continued throughout 2023 — 57% of direct to consumer (DTC) brands say they’ve increase CTV ad spend this year.

Legacy Advertising Solutions Must Adapt, or Risk Being Left Behind

Having experienced success on performance marketing channels — like Meta and Google — many brands in today’s highly digital landscape want advertising platforms that deliver like a performance channel. And, advertisers who frequently use these channels have become comfortable with how to use them to produce results. Ease of use is key — newer companies aren’t interested in media channels that look and feel like they’re from the age of fax machines and landline phones, and that’s going to compound in the years to come.

Does this signal the end for linear television advertising growth? Not necessarily. Legacy TV advertising solutions — including those in the streaming industry — may simply need to adapt. Wieser suggests that one way to do so is by becoming a comprehensive advertising platform. This way, brands of all “stages of life” can have a solution that delivers premium inventory, robust reporting, audience targeting, and other performance-first features all in one place. Is it just us or does this concept sound familiar?