An unsteady economy and the resulting uncertainty about what to expect are the main factors driving marketing and ad agencies’ strategic planning at this point in the year, according to the newly released annual 2023 New Year Outlook Survey Report from RSW/US, a leading outsourced agency business firm for marketers. This uncertainty rears its head in several of the report’s stats, along with the continuing tradition of the often-divisive symbiotic advertising/marketing relationship.
But even though caution is the early theme for advertising agencies, this doesn’t seem to be the case for marketers
The number of marketers planning to invest in non-marketing spending in 2023 (59 percent) jumped 38 percent points compared to last year—very different from agencies who dropped 20 points in their enthusiasm for investment.
In another example, 61 percent of marketers said they expect marketing spend to increase somewhat/significantly in 2023. Only 36 percent of agencies believe their clients will increase marketing spending somewhat/significantly—a 37-point drop from last year—which may be better news for agencies than they realize.
And on the agency business development front, two interesting stats: marketers continue to look for specific expertise from their agencies, with 92 percent saying category expertise will be very/moderately important when considering new agencies in 2023, and almost half (44 percent) of marketers report they learn about agencies via direct agency outreach.
So what does this mean for marketers and agencies in 2023?
There are many reasons for agency optimism, according to the report: marketer spending expectations, in-house agency decreases, and the consensus from marketers that agencies are staying on top of trends.
A certain level of caution on the agency side is warranted, but along with taking precautionary steps based on the economy, agencies can’t ignore the need for an ongoing new business, organic growth, and client retention plan.
One thing affecting small and mid-sized agencies in the back half of 2022 was an overall slowdown in ongoing client work—it took a lot longer to get projects going, or started.
2023 will be a real proving ground in terms of remote work, agency culture, and establishing protocols and strategies that ensure a strong flow of new business and solid productivity, as well as a healthy, challenging and satisfying work environment.