Every 18–24 months, I work with our dedicated forecast team to evaluate and size spend on digital marketing in the United States. In our most recent effort, “The US Digital Marketing Forecast, 2018 To 2023,” my forecast analyst colleague, Brandon Verblow, and I found that spend on search marketing, banner and outstream video, instream video, and email marketing will grow at a 9% compound annual growth rate (CAGR) to $146 billion by 2023. This trend signals slightly slower growth than in our 2016 forecast. But spend on digital media (primarily what we size in this study) is still outpacing spend on marketing technology and services, even with CMOs and CIOs pouring money into automation.
Twenty years into the digital marketing game, we find that:
- People use more digital media than ever. Someone coming of age in 2023 has never known a world without the internet. And they are in no way refusing to use it, despite much handwringing over too-frequent invasions of privacy.
- A growing economy grows digital investment. US real GDP is growing at nearly 3%, its highest since Q1 2015. And when business is up, ad spending, including digital spending, grows.
- New direct-to-customer models rely on digital. Digital is the lifeblood of models such as The Farmer’s Dog or Warby Parker, which ship custom dog food and eyeglasses, respectively. Digital does for these firms what physical operations do for traditional brands: scaling order taking, production, and local delivery, as well as enabling an intimacy with customers that wouldn’t be possible without email, text messaging, or social media.
These positive forces aren’t hastening runaway digital growth, however, because companies of different types spend on digital in different ways.
- Digital newcomers are boosting digital mainstays, such as email and search marketing, fast. Regulated companies or those with indirect sales models — like pharma or manufacturing — are just now getting to a place with digital where we saw retail or travel companies 8–10 years ago.
- Intermediate and advanced marketers are taking a more measured approach to digital budgets. This means rethinking where ad dollars can be most effective for accomplishing customer and business goals. Sometimes this moves budget outside of media altogether toward customer experience, employee training, or technology.
We explain the growth trends for search, banner, online video, social media, and email marketing in the full report, “The US Digital Marketing Forecast, 2018 To 2023.” Take a read to plan your own budgets and to prepare for some unexpected line items coming soon to the marketing budget — such as employee experience.
See what Brandon Verblow has to say about this research here.