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US B2B ad spend set to pass $30b in 2023, nearly half the dollars will go to digital

B2B ad dollars are moving to tablets and phones, forever.

The B2B shift to digital ad spend is accelerating more quickly than most could have imagined, according to eMarketer’s US B2B Advertising Forecast ’21. With a surge of dollars now being directed at mobile and display advertising, the move away from traditional B2B marketing as we knew it is now permanent.

Business-to-business (B2B) marketing has changed forever. With traditional ad spending dipping and digital soaring, there are three key tipping points on the near horizon. By 2023, nearly half of the $30.6 billion spent on B2B advertising will be digital, according to eMarketer’s US B2B Advertising Forecast ’21. Additionally, for the first time, more than half of B2B marketers’ digital spend will be focused on phones and tablets versus non-mobile devices (laptops and desktop computers.) And display advertising will surpass search advertising.

Overall, ad spending in the B2B sector fared fairly well during lockdown. It was roughly flat at $22b thanks in part to a second half rally of digital ad spending. This year, total spend is expected to hit $26b. Next year’s tally is pegged at $28.3b and in 2023 spending will surpass $30b.

Along the way, the marketing mix will change significantly. Traditional B2B ad spending (TV, print, radio and outdoor) plummeted 10% last year. It took five years, previously, to see the sector shrink by roughly the same level.

A rebound is on the way but it will be short-lived. This year, traditional B2B spending will hit $15b growing 11.2%. But that percentage is expected to flatten out to only 0.8% growth by 2023 when traditional spending is projected to hit $15.78b. While that’s still a significant number, it will fall short of $16.03b B2B marketers spent in 2019.

Traditional B2B ad spending “will never recover to 2019 levels,” says eMarketer’s principal B2B analyst Jillian Ryan. “It’s anemic.”

“There were some assumptions that once in-person returned that B2B advertisers would go back to some of those traditional channels and they are,” says Ryan. “But they're not taking away those allocations from digital. That spend that will not go away. It’s an exciting, permanent transformation.”

Lots of ad growth on display

Digital ad spending is a different story entirely. This year, it’s expected to climb 16.5% to $10.84b — crossing the $10b threshold for the first time. After reaching $12.65b next year, it is projected to hit $14.57b in 2023.

Mobile spend, meanwhile, had been stalled because of lockdown – but no more. Mobile B2B ad spend is expected to double last year’s tally ($3.5b) reaching $7.43 billion in 2023. This will mark the first time marketers will be spending more on mobile (51%) than non-mobile devices (49%).

No matter what the device, display advertising is expected to sprint past search advertising. eMarketer defines display advertising as banner, rich media, custom content sponsorships, videos, webinars, all social media advertising, including LinkedIn and Facebook, connected TV and audio.

B2B marketers will spend $5.09 billion on display advertising this year, up 32.6%. This number is projected to reach $7.29b in 2023 making it the largest area of ad spend. LinkedIn is currently the big winner here pulling in 32.2% of display revenues. LinkedIn is projected to draw more than $2 billion from display ad revenue come 2023.

Display advertising will also pass search advertising in 2023. Search advertising includes keywords, search terms, paid listings, paid inclusion, and contextual text links. This year search spending will hit $5.36 billion dollars but it will grow more slowly than display ads, hitting $6.85 billion in 2023.

“In many ways B2B marketers are starting to mirror how consumer brands are spending on digital, says Ryan. “They are really trying to just push the bounds on what's possible with their digital advertising.”

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