Latest trends in marketing spend: Key budget influencers

In the ever-changing world of marketing, staying ahead of the curve is crucial for success. For marketers gunning to take that lead, thoroughly reflecting on past trends is key to thriving in the years to come – and that includes understanding the patterns of advertising and marketing spend.

2023 was another tenuous year marked by layoffs, inflation and interest rate increases, and as the challenges of this year fade into the rearview mirror, it’s up to marketers to decipher trends and forecasts that are shaping marketing spend in 2024. At a recent Deluxe-hosted event, the consulting firm Winterberry Group – a specialized management consultancy with over two decades of expertise in advertising, marketing, data, technology, media and commerce – shared their forecasts for the coming years, providing a glimpse into what could be the future path of marketing spend.

What factors influence marketing spend?

The economic climate is a major factor responsible for influencing marketing budgets and strategies. While a recession was avoided in 2023 and will likely not occur in 2024, experts from the Winterberry Group note that uncertainty of the macro environment have slowed growth in all sectors of business. Marketers are being asked to “do more with less,” resulting in the reallocation of staff and budgets, with greater focus on tools that can streamline or reduce labor (for example, machine learning).

A look back on trends in marketing spend 

It should come as no surprise that digital marketing spend has been dominating direct mail. Last year, the cost of traditional marketing spend was closer to what it was in 2021, and a continued downward trajectory is predicted. The growing presence of digital media can be seen through the expansion of retail media, the rise of connected TV (CTV) and the enduring dominance of paid social. 

Predictably, as digital rose, traditional fell. Direct mail saw its lowest spend year since the recession, falling 13.4 percent from 2022 to 2023. But just because direct mail is seeing a decline in spend, that doesn’t mean marketers should disregard it so quickly. With out-of-the-box thinking, there exists plenty of opportunity for innovation. It’s possible to transform direct mail into a performance media channel that could lead to future success. For example, marketers could explore integrating and managing direct mail campaigns via marketing automation platforms for acquisition and retention. Winterberry Group also recommended utilizing USPS informed delivery to bring seamless online-to-offline amplification and awareness for direct mail.

Emerging trends and their impact on industries

In response to ever-changing market dynamics, marketers across industries are having to adapt, even borrowing tactics from adjacent sectors. While entertainment is transitioning from linear TV to streaming platforms and retail is embracing connected commerce, a significant example of shifting practices lies in the consumerization of the B2B industry.

B2B tries something new

B2B companies are adopting B2C-like marketing practices, a shift driven by how decisions are now made within specific buyer groups. While omnichannel marketing has traditionally been dominated by retail marketing, other sectors are starting to catch on to the value of reaching connected, omnichannel shoppers where they are.

$15 billion a year is shifting into commerce media networks to drive demand and conversion – and that figure includes much more than grocery. With this increase, media buying and measurement will continue to see greater complexity. To solve this, marketers are turning to machine learning (ML) to find audiences, optimize creative and leverage generative AI to improve search.

The consumerization of B2B is expected to continue trending, spurred on by more socially influenced, digitally native buyers and how they make decisions. B2B is rapidly going omnichannel, expanding the use of data-driven nurturing, adopting more digital media channels and utilizing hybrid experiences. To be successful in this new frontier, B2B marketers will need to break down organizations silos to support integrated omnichannel customer journeys across more hybrid experiences. Leaders need to get on board with this new approach as well, and there’s growing recognition that upper-funnel branding investments are needed along with improved marketing measurement.

Sincere sustainability

Regardless of industry, sustainability has become an increasingly significant consideration across advertising, marketing and product packaging. Businesses should consider the significance of their commitment to sustainability, as “green washers” are likely to get called out for their insincerity, risking brand reputation.

AI is everywhere

Another trend being seen across all sectors is the prevalence of video, especially video that involves AI generation. AI is transforming not just creative production, but it’s also impacting activation and measurement. Creative production and content creation growth has been accelerating, thanks to the demand for more consistent content across platforms. Brands are trying to produce more content at scale with faster production cycle times, while managing costs and maintaining sustainability. ML and generative AI are enablers to capture value, but they require production management transformation across creation, activation, optimization and measurement. The idea is not for AI to replace human creativity – instead, generative AI can transform the rest of the production process.

It’s no surprise that generative AI is reshaping marketing strategies, offering both opportunities and challenges for marketers. While generative AI brings the promise of greater personalization, faster production and more content, consumers have significant concern with governance and how their personal data and content will be used by AI. As a result, governments raced to provide a regulatory framework while unions sought to codify protections. Strategic and venture investors have begun to pour investment into AI infrastructure and application development.

With regulatory fragmentation increasing, the large language models (LLMs) need to ingest content and data, heightening concerns around copyright infringement, misinformation, bias and hallucination. Marketers should expect innovations in transparency, with better labeling and watermarking of AI-generated content to build brand trust and mitigate risk.

Forecasts and predictions for 2024 and beyond

Looking ahead, experts at Winterberry Group anticipate continued growth in marketing spend, driven by many of the sector-specific trends and economic indicators that impacted 2023. As expected, digital marketing is projected to claim an increasingly significant share of marketing spend. Because of this continued shift towards digital channels, businesses should invest in data infrastructure, particularly first-party data and investments in data clean rooms. 

With the increasing demand for omnichannel and video content, budgets spent on this type of media are predicted to continue climbing. In tandem, marketing spend for generative AI to aid in content production, activation and measurement are also on an upwards trajectory.

According to Winterberry Group’s publication “The New Creative Paradigm,” marketers are focused on leveraging creative intelligence for optimizing video and digital content in digital paid media campaigns, on owned properties (mobile and website), and for versioning and in-campaign optimization of paid media on owned properties.

These predictions for the future trajectory of marketing spend underscore the importance of agility and adaptability in navigating the evolving marketing landscape. And as marketers navigate the complexities of marketing spend in 2024, one thing remains clear: staying informed and proactive is key. By understanding trends and forecasts, leaders and decision-makers can position themselves to capitalize on emerging opportunities and address potential challenges head-on. Here's to a year of innovation, adaptation and growth.