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After a tough 2023, agencies see 2024 as the year when their business starts to pick up. But even after such a difficult year, we remain wary of the economy.
At least, that's what Digiday+ Research found in a survey of agency professionals late in the fourth quarter.
Agencies expect ad spending to rebound this year after a tough 2023, according to a Digiday survey. A roughly equal share of agency professionals told Digiday earlier this year that they thought advertiser spending would increase further in 2023, with 39% saying so. Last year, 38% said they agreed with advertisers increasing their spending. But this year, 61% of agency professionals told Digiday they agree that advertisers will spend more, compared to just 22% who disagree.
The change represents a reversal of the agency's past stance on ad spending. At the end of 2021, 76% of agency professionals said they agreed that advertiser spending would increase in 2022, and at the end of 2020, 71% agreed that advertiser spending would increase in 2021. He told Digiday that he is. A significant move in that direction.
Nearly half (44%) of agency professionals said their 2023 revenue will increase compared to 2022 revenue, according to a Digiday survey. This seems like a healthy percentage considering that last year, 78% of agency professionals said their revenue would increase in 2022. 80% said their 2021 revenue was higher than 2020, and in the previous year 80% said their 2021 revenue was higher than 2020.
Meanwhile, 30% of agency professionals told Digiday at the end of 2023 that their revenue was lower than in 2022, compared to 16% who said the same at the end of 2022 and 11% at the end of 2021. Ta.
However, this year's decline in revenue was not necessarily unexpected. In the fourth quarter of 2022, just over two-thirds (68%) of agency professionals said they expected their company's 2023 revenue to exceed their 2022 revenue. I answered. Again, this number sounds high until you compare it to previous years. At that time, 81% of agencies said they expected their revenue in 2022 to be higher than in 2021. And as we look forward to this year, a Digiday survey found that agency professionals expect real returns. Rebound first. 87% of agents said they expected their revenue to be higher this year than last year at the end of 2023.
A Digiday study found that advertising spending by agencies on behalf of clients fell last year, and advertising spending by clients is on the decline. Just under one-third (32%) of agency professionals say their clients' advertising spending will increase in 2023, just over half (55%) in 2022, and 70% in 2021. decreased from The company said the rate of decline in client ad spending is on an upward trend, rising to 14% in 2021, 26% in 2022 and 32% by the end of 2023.
However, more than two-thirds (67%) of agency professionals said they expected their firm's advertising spend on behalf of clients to increase this year compared to last year. 60% expect their clients' advertising spend to increase in 2023, and 81% expect the same in 2022.
Other highlights from our research:
- Interestingly, Agencies feel that last year was actually a successful year.. Almost two-thirds (65%) of agency professionals agree that their company is set for success in his 2023, while just over a quarter (26%) disagree was. However, this 65% is significantly lower than the 84% who said their company had a successful 2022 and the 85% who said 2021 was successful.
- However, the data for the agency business as a whole appears to be quite different. Just over a third (35%) of agency professionals agreed that it was a successful year for their agency business. In 2023, 73% agreed that the agency business was successful in 2022, and 71% agreed that the agency business was successful in 2021. Meanwhile, almost half (48%) of agents disagreed that their agency business was successful last year, up from 14 companies. % in 2022 and 10% in 2021.
- Digiday's investigation found that 2024 is an optimistic outlook for government agencies Almost three-quarters (74%) of agency stakeholders said they agreed they were optimistic about their company's outlook for this year. However, this is down from 82% who said they were optimistic about 2023 and 93% who said they were optimistic about 2022.
- I repeat, When it comes to the agency business as a whole, that optimism doesn't quite hold true. Just over half (52%) of agency professionals said they agreed they were optimistic about the outlook for their agency business in 2024, down from 70% last year and 82% the year before.
- Almost two-thirds (65%) of agency stakeholders said they agree that economic trends will have a negative impact on their company's performance in 2023This is roughly unchanged from the same response in 2022, which was 63%. Only 17% of respondents disagreed that the economy hurt businesses last year.
- The economy continues to be a big concern for agencies this year. More than half (52%) of agency professionals say they agree that economic trends will have a negative impact on their company's performance this year, up from 56% who said the same last year. It only decreased slightly. At the same time, more than two-thirds (67%) of agents say economic trends are the biggest challenge facing their industry last year, and 52% say the economy is the biggest challenge facing their industry this year. did.
- What Digiday's research revealed Most agencies have expanded their services in the last year, which makes sense in a tough year. More than two-thirds (68%) of agency professionals said the number of services their agency provides will increase in 2023. This is a slight increase from the 60% who said the same in 2022 and the 62% who said the same in 2021. A quarter (23%) of agency professionals say the amount of services they provide is the same as last year.
