MediaRadar Blog

The State of B2B Advertising: Brands Are Spending Despite the Uncertain Times

In 2022, inflation surpassed 9%, Facebook had its biggest one-day value drop ever, and we entered a recession

Oh, and the economic outlook is worse for 2023, with global growth forecast to slow to 2.7%, which would be the weakest growth profile since 2001.

To say there’s economic uncertainty right now would be the understatement of 2022 (and probably 2023).

With so much in flux, B2B ad spending should be down, right? 

After all, when times get tough, everyone—businesses and consumers included—spends less.  

Not so fast. 

Through Q3, spending on B2B digital and print publication is up by 2% YoY.

That said, the tides may be turning for some advertisers. For others, not so much. 

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Mayday, Mayday, Mayday

At the end of April, Dr. Fauci said that the U.S. was “out of the pandemic phase.” 

This shift toward normalcy ignited the ad strategies of advertisers across the board. 

As a result, January, February, March and April each saw YoY increases in B2B ad spending. The number of advertisers investing in B2B media also increased. 

Unfortunately for these advertisers, all good things must come to an end. 

In May, rumblings of a recession stopped advertisers in their tracks.

On May 20, Schwab published an article titled “Signs Point to Rising Recession Risk.” 

Although not everyone thought a recession was coming—an economist said the economy was “nowhere near a recession“—the writing was on the wall. 

B2B advertising since May reflects that. 

From May through July, B2B advertising decreased by 1% YoY each month, while August and September saw dips of 3% and 5% YoY, respectively. 

At the same time, the number of B2B advertisers dropped by 3%, driven by declines in August and September by 10% and 15% YoY, respectively. 

The realization that the U.S. was, in fact, on a collision course with a recession undoubtedly caused the bigger dips in August and September.

But the uncertain macroeconomic times haven’t impacted the B2B advertising world equally. 

In fact, some industries are thriving.  

Hospitality Advertising Is Back

In 2020 alone, the global tourism industry lost $935b in revenue as state and federal restrictions stalled all travel plans.

While 2021 was a step in the right direction—international tourism receipts worldwide increased by more than 13%—most hospitality advertisers still couldn’t justify pre-pandemic spending.

This year’s been a different story.

According to the U.S. Bureau of Labor Statistics, leisure and hospitality are projected to mostly recover from pandemic-driven employment losses.

As countries opened their borders, ad dollars followed. 

Through Q3, B2B hospitality advertising increased by 42% YoY, as advertisers from hotels, hospitality groups, hotel groups, restaurant software and hospitality software spent more than $25mm (up from $17.9mm in 2021). Collectively, these five categories accounted for 65% of B2B hospitality spending.

The number of advertisers also increased, with the quarterly average going from 540 to 640.

Despite a not-so-favorable economic outlook for 2023, B2B hospitality advertising is in a unique position to thrive, thanks to the rise of “revenge travel”, or the “sense of urgency, and impatience, to travel once again.”

After more than two years of restrictions, millions have made it clear that travel isn’t getting axed from their budgets. In fact, more than half of Americans deem travel an “important budget priority” during a recession. 

While hospitality advertisers have a more favorable outlook, Q4 into Q1 2023 could look different. 

Not only are many popular tourist destinations entering their off-seasons, which will naturally reduce travel levels, but the rising cost of airfare will remain a prohibitive factor, even for those who said their vacations wouldn’t get cut. 

Investment Firms Miss the Mark

Despite much of the world tightening its belts, B2B finance advertising decreased spending by 2% YoY—and if it weren’t for investment firm advertisers dropping the ball, this category would be up.

Through Q3, advertisers from banks, financial institutions, financial websites and financial software increased their spending as society intensified its interest in finance. According to Northwestern Mutual’s 2022 Planning & Progress Study, 73% of U.S. adults say the pandemic has created better financial habits. 

Advertisers for investment firms were on the opposite end of the spectrum. Through Q3, these advertisers decreased their spending by 27% YoY following a period of rapid business growth.

To put this into perspective, JPMorgan Chase posted Q3 results that “exceeded expectations on a $1.5b boost from better-than-expected loan losses.”

A month prior, Goldman Sachs announced that it was buying Dutch asset manager NNIP for around $2b.

That growth is coming back to bite investment firms, who are responding by cutting costs.  

Morgan Stanley, for example, is expected to start layoffs in the coming weeks as dealmaking dries up.

So, while much of the B2B advertising world will weather the storm, investment firms will almost certainly remain in a holding pattern. Unfortunately for them, they might have to wait until 2024.

Bloomberg economists pegged the odds of an economic downturn by October 2023 at 100%.

B2B Advertisers Take Any Reason to Spend

Advertisers of all stripes feel pressure. 

That pressure will continue into 2023, forcing the entire B2B advertising ecosystem to put on their hard hats. 

Some advertisers, especially those promoting “must haves,” will continue to spend—a trend we’ve seen with some hospitality and finance advertisers. 

For hospitality advertisers, the spending is justified because people refuse to give up their next vacation. 

For certain finance advertisers, the uncertain economy continues to put a premium on their products and services. 

The same spending strategies are happening elsewhere. 

For example, advertisers for CNC Machine Tools collectively increased their spending by 74% YoY. (The entire B2B aerospace advertising category was up by 20% YoY as the industry fought to make sure Elon Musk and Jeff Bezos weren’t the only two people exploring outer space.)

B2B Aerospace CategoriesYTD 2022 Ad InvestmentYoY
CNC Machine Tool$4,069,34674%
Jet Aircraft$2,630,97718%
Aircraft Parts$1,884,66018%
Industrial Tool$1,657,54023%
Manufacturing Software$1,622,35617%
Aircraft Manufacturer$1,363,7001%
Aerospace Association$718,50216%
Aerospace/Aviation Recruiting$236,36119%

For CNC Machine Tool advertisers, spending comes in tandem with industry growth and ongoing changes in manufacturing.

Similarly, B2B energy advertising increased by 23% YoY as the world remains committed to the environment and the sector responds with innovation. That said, the number of advertisers decreased by 15% YoY, indicating that the advertisers who are spending are shelling out more. 

So, is B2B advertising in a state of flux? Sure, but every advertiser, regardless of their industry, is feeling the heat. 

That said, our data shows that despite the uncertainty, many B2B advertisers won’t hesitate to open their wallets if there’s a reason to spend.

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