Warc downgrades its adspend growth predictions for 2022 and 2023

However, the report predicts this growth will slow to 2.6% in 2023 as investment is restrained by economic conditions, as well as a reduction in third-party cookies used for marketing purposes. The forecast is based on data gleaned from 100 markets around the world.

Warc’s latest prediction is a downgrade of 4.3% to the previous 2022 growth forecast, and a 5.7% drop in the 2023 forecast – compared to the company’s previous global expectations released in December 2021. 

Drop of almost US$90-billion over two years

These figures equate to drop in growth potential of almost $90-billion over the next two years.

Warc believes social media advertising spending will grow by 11.5% in 2022, compared to 47.1% in 2021. In 2023 this is expected to decrease to 5.2% growth.

Some of this is due to the impact of small and medium-sized businesses “bearing the brunt of worsening economic conditions”, leading them to reduce advertising activity, which negatively impacts the social media platforms the hardest.

In addition, Apple’s blocking of third-party cookies across its approximately two-billion devices has already had an adverse impact on social media companies relying on this data.

According to Warc, this and Google’s now-delayed decision to deprecate cookies from its Chrome browser will remove $40-billion from social media companies’ bottom line in 2022 and 2023.