How ad agencies can cope with reduced spending from tech clients

Tech clients are slashing their marketing budgets following the massive layoffs across the globe earlier this year. This is also reflected in the latest financial results of global advertising holding firms. 

According to the recent quarterly results from WPP, Q3 like-for-like revenue less pass-through costs decreased by 0.6% with growth in the UK, Western Continental Europe and the rest of of world, offset by declines in North America, with continued weakness from technology clients and in China.  

Mark Read, chief executive officer of WPP, said: “Our top-line performance in Q3 was below our expectations and continued to be impacted by the cautious spending trends we saw in Q2, particularly across technology clients with more impact from this felt in GroupM over the summer than the first half.” 

Meanwhile, Philippe Krakowsky, CEO of Interpublic Group, also said during the third quarter of 2023, IPG’s revenue performance did not measure up to expectations, “factors that we have identified since the early part of the year continued to weigh on our growth in the quarter. These include the decreases in client activity in the tech and telecom client sectors that have been evident across our industry, and the performance of certain of our digital specialists.” 

“Another factor impacting results is increased concern among marketers related to macroeconomic conditions, which led to the delay of projects and sales cycles, as well as slower-than-anticipated onboarding of some new business,” he added.  

Potential reasons behind 

While the rise of AI and other new digital technologies may have played a role in the reduced budgets from tech clients, Industry players MARKETING-INTERACTIVE spoke to attributed this phenomenon to the increasingly difficult economic and political climates.  

Keso Kendall, SVP, APAC at TEAM LEWIS, said economic and political climates make companies more cautious, as well as increased difficulty grasping customer

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Why Your Tremendous Bowl Ad Spending plan Should really Go To Shopper Assistance

  • Alternatively of paying on common advertising and marketing, spend cash in improving upon the buyer knowledge.
  • Greater purchaser support sales opportunities to a large ROI, content clients, and more powerful referrals.
  • Referred prospects are considerably less pricey to get and are much more valuable and faithful to the model.

Current investigate claims clients acquired by word of mouth internet marketing are far better clients than buyers obtained by regular advertising and marketing. Referred consumers invest much more dollars, refer their friends, and keep lengthier. Referred customers are incredibly worthwhile.

Shoppers acquired by means of conventional advertising bring about damage to your model. These buyers price you dollars and are not as valuable.

Hundreds of thousands of men and women all around the earth will tune into the Tremendous Bowl on Sunday. Apart from the recreation by itself, the commercials garner the most interest. But that interest will come with a significant cost tag. In 2023, a 30-second Super Bowl industrial fees a record-superior normal of $7 million.

Imagine what you could do with $7 million invested in correcting your damaged shopper encounters?

In a way, advertising is a type of unwarranted hypnosis. You check out my advert, I mail you subliminal messages to acquire from me, and then you go invest income with me.

It assumes people are not intelligent or discerning.

Anyway, does anybody observe advertisements anymore? I really do not. As a substitute of seeking to trick shoppers by promoting, what if corporations invested funds on really cutting down anxiety for clients?

Buyer encounter is an expense in the truth of what desires to be fixed versus the fantasy the brand has about alone.

ROI of Customer Encounter

Firms invest close to 12% of their yearly earnings

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Ad spending forecast to grow 6% in 2023 as digital priorities shift

Dive Brief:

  • Advertisers are expected to spend an estimated $509 billion in 2023, up 6% from $481 billion last year, according to findings by the Winterberry Group shared with Marketing Dive.
  • An estimated $307 billion, just over 60% of the total, is expected to occur on online channels, according to the report, “The Outlook for Advertising, Marketing and Data 2023.” CTV is expected to be a big recipient of investments, growing at a rate of 27%.
  • Investments in data segments, including data, data services, platforms and identity are projected to increase 7% year-over-year for a total of $34 billion.

Dive Insight:

The Winterberry Group’s report pushes back against some of the grimmer trends seen in the second half of 2022, when the industry began losing steam. Inflation and economic woes have put a strain on the industry, leaving some in fear of what 2023 will hold. While digital growth is likely to decelerate in the months ahead, overall it will remain strong, with certain sectors expected to see significant growth, per the report.

Investment shifts within the digital advertising sector are not surprising, given the momentum behind CTV, digital out-of-home and influencer marketing. While CTV is leading the digital growth pack, digital-out-of-home channels are expected to grow 10% while influencer channels are expected to grow 17.5%.

An overarching theme is how budgets shifts within digital marketing are likely to have a bigger impact on the landscape in 2023 than the years-long shift away from offline channels. The total offline spend in 2023 is estimated to be at $201.9 billion, with newspaper, magazine, radio and linear TV spend to drop between one and eight percent.

An increased reliance on artificial intelligence (AI) and the need for ongoing updates to data infrastructure are also bound to impact the marketing industry.

“The rising

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