1、Outlook for B2B Advertising and Marketing 2023:Clouds On The Horizon or Steady Growth?Bruce Biegel,Senior Managing PartnerJanuary 26th,2023AboutWinterberry GroupWinterberry Group is a strategic consultancy specializing in advertising,marketing,data,technology and commerce.With our deep industry,oper

2、ational and M&A expertise,we bridge strategic growth and tactical execution.Our market insight and intelligence provides unprecedented speed to action.Through our highly collaborative approaches,we enable knowledge transfer and actionability,giving our clients a competitive edge and driving increasi

3、ng employee,client and shareholder value.2 2Looking Back at 2022:Economic Headwinds and Marketing TransformationWhy Did the Hyper Growth of 2021 Fizzle in 2022?4Inflation soared primarily driven by the supply sideInterest rates increased 7 separate times as the Federal Reserve fought to stem rising

4、inflationEquity markets worst year since 2008-2009,mortgage rates stalled,housing market boom Unemployment stayed low,as the supply of workers remained constrainedFear of a recession came back into the conversation for 2H 2022 into 2023Consumers,faced with higher costs slowed spending growth,GDP gro

5、wth slowsReview 2022:Advertising and Marketing Spend Reached$49BB,16.8%Y/Y Growth Outpaces the Broader Market5Source:Winterberry Group Spend Estimates(2023)Note:Media spend includes ad and marketing spend on traditional/offline channels,digital channels and events/sponsorships;excludes spend on agen

6、cies/services,lead gen,demand gen(B2B),data and data platforms$50.41$34.64$42.73$49.92$376.6$363.8$439.7$480.82019202020212022%B2BB2C13.4%9.5%9.7%10.4%Total US Ad and Marketing MediaSpend%YoY-3.4%+20.8%+9.4%US Total Annual Advertising and Marketing Media Spend,%B2B2019-2022($BB)Experiential/Event&Sp

7、onsorship$17.0 Linear TV$6.6Direct Mail$6.3Terrestrial Radio$1.5Out-of-Home(Traditional)$1.0Magazine(Print)$0.9Newspaper(Print)$0.8Review 2022:Experiential/Event Marketing and Sponsorship Comeback Fueled Offline Channel Growth6Source:Winterberry Group Spend Estimates(2023)Total:$34.1BBUS B2B Offline

8、 Media Marketing Spend,by Channel,2022($BB)+41.7%-5.0%+15.9%+2.5%+7.8%+0.8%-9.1%-5.6%Digital Out-of-Home$0.2Display and Video$2.6Email$0.9CTV$1.0Search$7.0Social$4.2Review 2022:The Combination of Display,Video and Social Almost Equal to Search Focus Remains on Performance Channels 7Source:Winterberr

9、y Group Spend Estimates(2023)Note:Display refers to banner ads that appear on desktop;email does not include marketing automation and technology Total:$15.8BB16.3%+18.6%+15.8%+18.8%US B2B Online Media Marketing Spend,by Channel,2022($BB)+5.8%+27.9%+46.5%Digital Media/Commerce$72.9(1,105)Marketing Te

10、chnology$40.3(1,247)Agency&Marketing Services$8.1(491)Traditional Media$17.2(211)Digital Advertising$5.8(237)M&A and Investment Activity,2022($BB)Marketing,Media and Technology Industries(#of Transactions)2022 M&A:Rising Interest Rates,Equity Market Declines Led M&A and Investment Activity Down Acro

11、ss Market Segments 8Source:Canaccord Genuity(2023)Total deal value of$144.2BB decreased 61.3%,down$229BB Y/YVolume of deals decreased by 18.7%,with 3,291 transactions vs 4,050 prior yearBuyer Activity in 2022But valuations have declined since beginning of the year,correlating with the realities of a

12、 diminished equity market and higher interest rates needing to increase debt costs(and lower availability)Marketing-related dealmaking is still active,notably at the mid-market level on targets of up to$1BB,with focus on consolidation of services to meet changes in channel mix-investment in new tech

13、 such as AI/MLAlthough SPAC and IPO markets are at standstill given public volatility,higher interest rates and broader economic uncertaintiesDealmaking Remained Active Across Middle Market Despite Public Market Volatility 9Source:Canaccord Genuity(2023)BuyerDeal Value%of Value#of Deals%of DealsStra

14、tegic$53.58 37%1779.0054.1%Private Equity Buyout$19.98 14%149.004.5%Private Equity VC Growth Capital$70.54 49%1362.0041.4%Agency Holding CompaniesData and TechnologyPrivate Equity2022 M&A Themes:Focus on Commerce,Tech-Enabled Media,Customer Experience and Measurement 10February 2022Identity resoluti

15、on and consumer intelligencefor$225MMJanuary 2022Acquired:for undisclosed amountCustomer data infrastructure solutionMarch 2022Invested in:TV-viewing app and analytics company for$325MMMarch 2022Acquired:for$160MMMeasurement and attribution platform for converged TVAugust 2022Invested in:Platform fo

16、r creative intelligenceSeptember 2022Tech-enabled insight and strategy companyfor undisclosed amountInvested in:October 2022Acquired:Performance marketing agencyDecember 2022Acquired:Account-based marketing platformfor$750MMfor undisclosed amountAcquired:Real-time,AI-powered SaaS platformfor undiscl

17、osed amountJuly 2022October 2022CX and Insights PlatformMay 2022Acquired:SaaS ecommerce intelligence platformfor$200MMDecember 2022Acquired:Canadian commerce agencyfor undisclosed amountAcquired:December 2022Acquired:US-based commerce agencyDecember 2022Acquired:Customer insights and advisoryfor und

18、isclosed amountfor$50-60MMleading in$110MM investmentMacro Trends:Whats Driving the Market?Trend:Accelerating Demand for More Integrated,Holistic Experiences Among B2B Buyers1273%of B2B buyers expect the same consistent and exceptional experiences as B2Cs.To meet expectations,B2B marketers are incre

19、asing focus and spend on blended experiences and personalization,mixing in-person and digital self-service interactions.TrendMarketers seek acceleration of omnichannel integration.Going beyond digital transformation and customer experience to a holistic brand experience requires faster“de-silo-izati

20、on”of marketing,servicing and supply chains.ImpactSource:Accenture(2022)Trend:The Need for Consistent Content Everywhere13In an“always on”world,consumers demand quality content at scale across channels.Brands focus on speed to content,quality control and cost.TrendAll creators of content have to con

21、sider the who and where before the whatthinking downstream utilization at the point of creation,building and delivering assets across formats and touchpoints.ImpactTrend:Continuing Strength of B2B Ecommerce and Retail/Vertical Media Marketplaces14Note:eMarketer(2022),McKinsey(2022)B2B ecommerce cont

22、inues to experience rapid growth,with revenue expected to grow 10.8%to 1.9 trillion in 2023,reaching$2.5 trillion in 2026.TrendRetail media and marketplaces spend has raced ahead($20BB to$45BB 2020-2022);new forecasts see$100BB in 2026,yet there is lagging focus in B2Bwhen will the shift to connecte

23、d commerce occur in B2B media and will it be accompanied by cost per order metrics along with ROAS?ImpactTrend:Experiential Marketing In Steady Recovery Reaching Pre-Pandemic Levels Is Still Not Expected Before 202415The number of(and participation at)in-person events continues to be on the rise wit

24、h 46%of B2B marketers anticipate increasing their investment in field and event marketing in 2023.However,expected increases through 2023 arent likely to fully offset 2019-2021 declines.TrendThe future of B2B events is hybridmarketers continue searching for the optimal model that combines in-person

25、and digital events while prioritizing quality of contacts and level of engagement.ImpactSource:Integrate and Demand Metric(2022)Trend:With Its Breadth of Effective Use Cases,ABM Is Gaining Significant Adoption as a Top B2B Marketing Tactic16ABM continued to gain traction among B2B marketers with inc

26、reasing demand for more efficient and precise targeting and nurturing:47%of B2B marketers reportedly increased their ABM budgets in 2022.TrendAs the adoption of ABM continues to rise among B2B marketers given its effectiveness,demand for platform,data and services providers to support ABM strategies

27、 increases.ImpactSource:Demand Generation Report(2022)Trend:PerformanceMarketing,With Its Emphasis on Demand Gen Driving Steady Investment in Data Infrastructure17Marketing data,enhanced analytics and new data platform spend is estimated at$4.1BB in 2022,representing 8.3%of total B2B marketing spend

28、 and forecasted to grow to$4.5BB in 2023.TrendAs the market continues to focus on improving lead quality and management,with spend on the data infrastructure to complement the sales centric CRMs and marketing automation platforms increases.ImpactSource:Winterberry Group Spend Estimates(2023),Accentu

29、re(2022)Trend:The Convergence of Linear&CTV Speeds Along,Though Not Seamlessly18The growth of connected video consumption across places,channels and devices is about seeking higher engagement:B2B video spend is forecasted to reach$9.9BB in 2023(3.6%from year prior)across linear,digital video and CTV

30、.TrendReaching the buyers across devices and platform,in office and at home,will continue to drive demand to integrate video buying but challenges to integration remain with issues around fraud,frequency capping and buying path complexities.ImpactSource:Winterberry Group Spend Estimates(2023)Reachin

31、g Decision Makers at Home:Complexity of a Fragmented Delivery Ecosystem;Navigating Across Multiple Video Buying Paths Targeted Buying PathsStreaming Apps for VOD Broadband ISPSet-top-Box ProvidersGaming and Streaming DevicesSmart TV OEMSDefinitionStreaming video content that can be watched anytime a

32、nd anywhere without the limitations of linear TV broadcasting schedulesThe connection providers who stream entertainment(movies,videos,music,etc.),delivering content via an internet connection to a subscribers desktop,mobile or TV without having to download contentA device from a cable/satellite pro

33、vider that allows users to view video content from specific internet providers by converting a digital television signal to analog to be viewed on a TV setInternet connected devices used for gaming that bypasses cable,broadcast,and satellite television platforms for connection to programming Manufac

34、turers of TVs with integrated internet connectivity that allows users to stream music and videos,browse the internet and view photos bypassing an external tuning device Source:Winterberry Group survey of brand marketers and media agency buyers in the US and UK,May 2022;n=12119Additionally,the Need f

35、or Both Identity Standards and Interoperability of Solutions Limit the Ability to Optimize Spend65.5%50.0%47.6%34.5%28.6%23.8%59.5%62.2%48.6%48.6%35.1%29.7%Number of paths onto the TV set(set top box(STB),streaming device,TV OEM,App,etc.)Complexity of measurementLack of identity standardsInteroperab

36、ility of identity solutionsDisconnected media buying platformsPrivacy leading to loss of identifiersUS RespondentsUK RespondentsWhat are the barriers to growth for the use of identity in advanced TV?(June,2022,%of respondents)Source:Winterberry Group survey of brand marketers and media agency buyers

37、 in the US and UK,May 2022;n=12120Trend:Post-pandemic Reset Leads to a Wave of Layoffs in the Tech Sector Slowing Growth Reduces Employee Demand21Tech companies experiencing growth deceleration has resulted in over-staffing against 2023 forecasts.The services and manufacturing did not see the same l

38、evel of overstaffing to date,making this segment specific so far.TrendThe over-staffing and limited ability to supplement with normal immigration enhanced the problem of a tight labor market to create significant upward wage pressure from 2020-2022.Rebalancing is expected to continue through 2023,th

39、ough positions including everything related to data&analytics continue to see high demand.ImpactTrend:Finding Balance in a More Regulated,Privacy-First World22Its about direct relationships in a first-party world,as privacy and data regulation accelerates impacting targeting and attribution and as a

40、ctivist FTC/European regulatory environment expands and dishes out fines.TrendNo more B2B exemptions:The FTC and new state-level privacy laws are evolving to include B2B consumer data as part of their enforcement,so marketers data practices must keep up with compliance.ImpactB2B:B2C:State-Level Priv

41、acy and Protection Laws by VA,CO,CT,and UT Will All Be in Effect In Stages by End of 202323 GeoNames,Microsoft,TomTomPowered by BingUS State Privacy Legislation Tracker(as of January 13,2023)Inactive Bills/No Comprehensive Bills ProposedEnacted LegislationActive BillsExcluded LegislationSource:Husch

42、 Blackwell(2023)California:In effect,California Consumer Privacy Act(CPRA)replacing California Consumer Privacy Act(CCPA)Utah:Will be in effect on Dec.31Colorado:Will be in effect on Jul.1Connecticut:Will be in effect on Jul.1Virginia:In effect since Jan.1Trend:The Complexity of Managing Talent Rise

43、s24WF Home,WF Office,WF Anywhere will be a non-stop discussion at all levels of the organization for another year.Wage inflation moderates from the rapid 2020-2022 increase:How will this be managed?TrendKey questions include how best to improve collaboration for strategy,creative,execution and the n

44、eed to(re)learn personal interaction skills.Look for the adoption of new collaboration/productivity solutions,new metrics for measuring productivity and more discussion about the right model(s)to adopt based on company and roles.ImpactTrend:Experimentation With,Early Adoption of AI/ML25B2B buyers ar

45、e expecting more personalized journeys that they have seen in their own B2C experiences as delivered by AI/ML and conversational AI.TrendB2B marketers are starting to lean into AI/ML;beyond conversational AI chats and paid media optimization,experimentations are under way with generative AI-modeled,

46、creative campaignsthe new forefront of AI/ML marketing use cases.ImpactAI/ML Marketing Example Use CasesConversational AIContent generationCampaign/creative developmentCustomer serviceSearchMachine LearningPaid mediaWebsite optimizationPersonalizationMarket researchPredictive analyticsMeasurement an

47、d attributionAdoption of AI/ML Presents a Plethora of Challenges Including Transparency,Accuracy and Ethical Concerns26ChallengesProliferation of misinformationEthical concerns and managing organizational compliance.Privacy and Federal/State regulationPerception of computer-generated content-how acc

48、urate are the data inputs?Lack of trust/transparency in AI software“When an AI doesnt have an answer to something and instead tries to come up with something plausible that might not be right.”-Fergal Reid,Director of Machine Learning,Intercom“For us its still automatically generated content,and tha

49、t means for us its still against the Webmaster Guidelines.So we would consider that to be spam.”-John Mueller,Google Search Advocate“It is a dual-purpose tech.If you dont monitor and control have the right governance,policy or compliance in the way you give access to these tools to everyone and anyo

50、ne on the internet,thats where it starts to get really tricky.”-Justin Davis,Co-Founder and CEO,Spectrum LabsOutlook for Spending 2023:Following the MoneyOutlook 2023:Growth Rates To Moderate With Forecast GDP Decline,Chance of Recession Looms Over Forecasts 28YearSpend($BB)YoY Growth(%)2019$50.4202

51、0$34.62021$42.72022$49.92023P$53.7-31.3%+23.4%+16.8%US B2B Advertising and Marketing Forecast Media Spend(20192023P,$US BB)Source:Winterberry Group Analysis(2023),Conference Board Economic(2022),CNBC(2022),Federal Reserve(2023),Goldman Sachs(2022)US GDP growth for 2023 is projected to be 0.2%Interes

52、t rate hikes moderate in 2023 with benchmark rate expected to climb to 4.5-4.75%Unemployment rate projected to increase to+4.6%FTC keeps the pressure on“controlling”the major social and adtech/digital platforms in pursuit of privacy,security and competitive marketsOther factors to consider:Regulator

53、y enforcement may bring clarity or could bring pain more privacy regulations coming despite a split Congress-headwind or tailwind but for which channels and providers?Overall advertising spend continues,de-coupling from historic 2X model;is it a permanent shift?Russia-Ukraine War and Chinas post-Cov

54、id economic return continue to impact supply chains,European growth,and commodity prices.Is it going to be a short/long or shallow/deep recession?+7.5%Experiential/Event&Sponsorship$19.0 Linear TV$6.3Direct Mail$6.1Terrestrial Radio$1.5Out-of-Home(Traditional)$1.0Magazine(Print)$0.8Newspaper(Print)$

55、0.8Outlook 2023:Offline Growth Rate Expected to Slow from 15.9%to 4.1%-Marketers Cautious on Budgets,Experiential Shines29Source:Winterberry Group Spend Estimates(2023)Total:$35.5BBUS B2B Offline Media Marketing Spend,by Channel,2023E($BB)+4.1%-5.0%+11.8%-2.5%-1.0%-5.0%-6.0%+0.4%Digital Out-of-Home$

56、0.2Display and Video$3.1Email$0.9CTV$1.2Search$7.8Social$4.9Outlook 2023:,The Secular Shift in Spend to Digital Continues With Strong Growth Through All Channels30Source:Winterberry Group Spend Estimates(2023)Note:Display refers to banner ads that appear on desktop;email does not include marketing a

57、utomation and technology Total:$18.2BBUS B2B Online Media Marketing Spend,by Channel,2023E($BB)+16.9%12.0%+13.7%+1.3%+19.2%+27.2%+14.9%Outlook 2023:While B2B Reallocation of Budgets Continue to Lag B2C Marketing,the Pattern of Spending Shifts Gain Clarity$43.3$25.0$29.4$34.1$35.5$7.1$9.6$13.3$15.8$1

58、8.2$50.4$34.6$42.7$49.9$53.7 20192020202120222023E Online MarketingSpend Offline MarketingSpendUS B2B Marketing Spend on Offline and Online Channels2019-2023E($BB)66.1%33.9%Source:Winterberry Group Spend Estimates(2023)31%of total spend(2023P).Thank you.Bruce BiegelSenior Managing P(212)842 6030 WinterberryGrp London New York Miami