What is influencing 2023 trends in UK marketing spend?
Near-term factors influencing trends in marketing spend include:
- economic uncertainty and softening of product spend,
- corrections in technology market capitalisations and increasing pressure from investors post-Covid,
- pressure for technology companies to shift from full revenue growth to a focus on profit and margins, and
- a reduction in marketing budgets and increased need to justify marketing activities.
As the UK macroeconomic environment improves, low growth of 2-3% is expected for B2C marketing spend in 2023
Marketing spend growth in H1 2023 remains significantly lower than the previous two years. Yet, better-than-expected macroeconomic conditions and high inflation has led to over-performance versus initial forecasts for the year.
In addition, we expect continued divergence in spend categories, with:
- stronger growth in paid digital media and external agency spend, and
- declines in traditional channels.
Although mid-term economic uncertainty remains, the more positive macroeconomic outlook has led us to readjust our forecast for the B2C segment from 2% to 3% for 2022-23.
Headwinds in the technology sector have driven cuts in B2B marketing spend, with stabilisation expected in H2 2023
The technology sub-vertical, a significant component of B2B marketing spend, has experienced investor pressure and a shift from growth to profit-driven mindsets. As a result, this has driven significant cutbacks in spend across all marketing categories.
Other B2B verticals are impacted by wider macroeconomic pressures and have therefore been less impacted than technology.
There is increasing stability from external pressures. However, given the rollbacks in H1, Plural has revised marketing spend growth in the B2B segment down from 4% to 3% in 2022-23.
To address these trends, there is a temporary focus on bottom-of-funnel marketing activities and an acceleration towards efficiency. This is reflected in marketer priorities for 2023 and resulting in a refocus of budget, delays in non-essential investments, and a reduction in spend on channels offering flexibility.
Download our updated UK marketing spend outlook to see details on:
- How a correction in technology sector valuations is driving significant cutbacks in B2B marketing spend and an acceleration towards efficiency
- B2C marketing spend by type, including tempered digital paid media and agency spend growth
- Revised forecasts of total UK marketing spend
- Company revenue growth by marketing segment
- Marketer priorities for the rest of 2023
- Which formats are outperforming 2023 forecasts
This UK update to our annual marketing spend outlook is based on publicly available data, statements from listed companies and Plural Strategy internal research.