‘Next year will be tough’: Sky, L’Oréal and Pubmatic debate 2023 budget trends
The Future of Media
Marketers will need to be “flexible”, and able to adapt to the uncertain economic climate when looking at media budgets for 2023.
This was the verdict of a panel of industry experts at Mediatel’s The Future of Media event. Looking ahead to next year’s media budget trends, the current economic crisis was at the forefront of their discussions.
“I think next year will be quite tough,” commented Bhavesh Patel, head of media at Sky. “Many advertisers will be looking at the ongoing recession, especially in the next two quarters, and thinking about what that means for their budgets and how they best adapt.”
The panel picked out some of the key trends they expect to see in the coming months.
Protecting brand spend
Patel believes looking after brand investment in tough times has been made easier thanks to lessons learnt during the Covid-19 pandemic.
“How do we protect brand spend? I think it’s easier now than it was five, six years ago. I think with the pandemic in the last couple of years, and with the sort of data we’ve got; upper funnel metrics, and things like share voice, share of market; we’ve seen what happens when you don’t spend on brand advertising.
“So although, in terms of the C-Suites, there’ll be one thing to focus on short term – in-year revenue – I think that debate about protecting brand investment will be easier this year.”
Flexibility will be key in 2023
The panel felt that being flexible would be crucial when it came to making the best use of media budgets, with Lisa Kalyuzhny, EVP of advertiser solutions, EMEA at Pubmatic, providing the technology partner’s perspective.
“Being flexible, being nimble is so important, because if you set the strategy and you’re forced into something, then you can’t look at the environment and see how things change,” she explained. “But that’s kind of our ethos and how we work with our partners, because we sit in the middle of the programmatic eco-space, and so rely on media owners, and also brands and agencies, and demand side platforms.
“I think that’s where programmatic succeeds, because you don’t have to forecast years in advance and you can call us and be like, ‘I need to run this campaign tomorrow’.”
Spreading investment across channels
Making the most of media spend across channels was something Gayle Noah, media director at L’Oréal, was keen to explore further. L’Oréal recently conducted successful pilots to look at cross video reach, and the impact of moving spend from TV into broadcaster video on demand (BVOD), YouTube, and Facebook.
“It gives us quite a lot of confidence that while we still maintain TV, we can mitigate some of that inflationary effect by moving money into other channels. There are lots of other metrics that we have to look at, but it’s something that we will probably continue with as we go into 2023, with the decline of linear audiences that isn’t going to go away.”
New investment possibilities with streaming giants
The panel also discussed the opportunities created by ad-funded offerings from Netflix and Disney+. Noah wasn’t concerned that the audience may be different to the current subscription base; instead it may be similar to the “Spotify model”.
“I mean, if you look at Spotify, some of our best campaigns are on the free service. So I’m not concerned about who’s actually signing up for the ad targeting. Obviously you’ve got the squeeze coming next year, I think people are going to be looking at their subscriptions, it probably will be a certain type of household that downgrades. Is it going to generate new subscriptions? Who knows?
“Until we start getting the data of who these people are, for me, I wouldn’t discount anybody on this, because we have products that are suitable for everybody.”
Chaired by Greg Grimmer, CEO, Mediatel Group, the panel ‘3 media budget trends you need to know’ included: Bhavesh Patel, Head of Media, Sky; Gayle Noah, Media Director, L’Oreal, and Lisa Kalyuzhny, EVP, Advertiser Solutions, EMEA, Pubmatic.