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Agencies had a good year in 2022.
Nearly 80% of the more than 70 agency professionals surveyed by Digiday+ Research in December said their companies’ revenues increased in 2022, and more than two-thirds said they think their revenues will increase again this year.
Digiday also found that this optimism extends to agencies’ ad spending on behalf of their clients.
Digiday’s survey found that after a strong year of client spending in 2022, agency pros expect more of the same in 2023 — even as the economy remains on uneven ground. Last year, 55% of agencies said their companies’ ad spending on behalf of clients increased. And this year, 59% expect clients’ ad spend to increase further. It is important to note the extent to which ad spending increased. Most of the respondents to Digiday’s survey (45%) who said their clients’ ad spend increased in 2022 said that spend increased somewhat. Meanwhile, only 11% of respondents said their clients’ ad spend increased significantly.
Interestingly, the percentage of agency pros who expect clients’ ad spending to decrease in 2023 came in lower than the percentage of respondents who said their clients’ spending actually decreased in 2022. More than a quarter (26%) said their company’s ad spending on behalf of clients decreased in 2022, while only 18% expect their spending on behalf of clients to decrease in 2023.
And while more than half of agencies saying their clients increased ad spend during what turned out to be a tumultuous year is a definite win in the current economic climate, the reality of client spending in 2022 did fall well short of agencies’ expectations for the year. According to Digiday’s survey of agency pros last year, 81% expected their companies’ ad spending on behalf of clients would increase in 2022. That’s a lot more than the 56% who said their clients actually did increase ad spending in 2022. In 2021, 70% of agency pros told Digiday their clients’ ad spending increased.
Breaking down this year’s data a bit further, it turns out that most of the expected growth in 2023 will likely be small. Nearly half of respondents to Digiday’s survey (47%) said they expect their companies’ ad spending on behalf of clients to increase only somewhat in 2023, compared with only 12% who said the increase will be significant this year. Nearly a quarter (23%) said they think their clients’ ad spending will neither increase nor decrease this year.