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Agencies weigh positives and negatives to 2024 spending in an uncertain economy

December 6, 2023
in Technology
Agencies weigh positives and negatives to 2024 spending in an uncertain economy
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By Antoinette Siu  •  December 6, 2023  •  3 min read  •

This editorial series examines industry trends across the media, media buying and marketing sectors as 2023 closes and the new year begins. More from the series →

Although 2024 is shaping up to be a big year for ad spending with the potentially most expensive presidential election in history on its way, there remains some uncertainty in the industry — given the economic conditions and move toward cookie deprecation.

That said, independent agencies are so far hearing a positive outlook from some clients, depending on their sector and size or performance of a particular brand. For others, spending looks to be more reserved in a still-recovering economy next year.

“Clients are keeping macro economic conditions in mind as we head into 2024,” said Stephanie Stanczak, vp of media operations at Ocean Media. “However, it feels to be a repeat from early 2023 where clients want to plan for the year, but have contingencies in place so they can pull back on dollars if needed.”

Focusing on brand and performance

Some media agencies said they are seeing increased spending in Q4, which can help stir more confidence for the upcoming year. But it also depends on the clients’ budgets that are “dictated by performance,” said Jack Connor, head of media at agency Geletka+. 

“We’ve seen stronger than forecasted results across the board so far in Q4, so we expect spending to continue trending up into the new year,” Conner added.

Warren Jolly, CEO of digital marketing agency adQuadrant, also noted fluctuation from category to category, adding that some larger brands will possibly “decline or be flat due to interest rates, inflation, incumbency and various other factors that will force them to take a more conservative approach.”

Other “challenger brands” will likely increase their 2024 spending to take advantage of this opportunity to increase market share while the big brands hold back, Jolly added.

Economic recovery

While holiday spending may provide momentum for the New Year, some say continued economic uncertainty will dampen spending for 2024. Nitin Sinha, head of paid media at agency Laundry Service, mentioned “some measure of pessimism regarding the economic outlook has persisted” as the holidays approach — as “clients are expecting year-over-year drops in ad performance.”

Christena Garduno, CEO of Media Culture, agreed that some brands are still “wary” of the inflation and economic uncertainty that is resulting in mixed feelings on the client side. Ongoing concerns about a potential recession are also adding to clients’ reservations about the year — with some maintaining their budgets and others indicating slightly more spending. A few have also said they will reduce marketing spending.

“Clients have so far been relatively frugal with their 2024 spending,” Garduno said. “Overall, clients’ reactions to the 2024 budget have been conflicting. Though much caution obviously exists, there is considerable optimism.”

However, there are some positive indicators as well. Sinha said there is optimism as some see inflation cooling — which may make consumers more confident well into the shopping season.

Ocean Media’s Stanczak also mentioned some categories that were “hit hard” previously may come back with additional spending in 2024. She sees optimism going into next year, but said the overall trends show “the market will continue to be relatively soft for at least the first quarter of 2024.”

https://digiday.com/?p=527936

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