Piper Sandler's 2023 US Ad Buyer Survey Findings

Investing.com – Piper Sandler released key findings from its fourth annual US Ad Buyer Survey, providing insights from around 40 respondents managing over $8 billion in digital ad spending. The survey reflects strong optimism regarding spending growth, increased adoption of AI tools, and improved economic confidence among advertisers.

Key Highlights

• Predicted Growth: For the first time, respondents anticipate an acceleration in both total and digital advertising spending in 2025. Total ad spend is projected to grow by 5.3% year-over-year, up from 5.0% in 2024. Digital ad spend is expected to see an 80 basis point acceleration.
• AI Tool Adoption: AI tools were highlighted as a major driver of spending. Respondents voted Google Gemini and Performance Max as having the most potential to enhance spending next year, each receiving 56% of the votes. Meta's Advantage+ and Amazon Media Cloud followed closely. 75% identified AI-powered advertiser tools as the most impactful trend in the industry.
• Economic Outlook: Economic concerns have eased significantly, with only 21% expecting a recession in 2025, down from 36% last year. Respondents feel privacy changes, like Apple's App Tracking Transparency, have mostly been accommodated, with 28% reporting performance has returned to pre-ATT levels.

The analysts at Piper Sandler noted, "All the main advertising issues have eased."

TikTok and Ad Formats

• TikTok: 64% of respondents find a ban on TikTok unlikely.
• Ad Formats: Digital video and Connected TV (CTV) are gaining momentum, expected to capture 22% of ad budgets in 2025, an increase from 18% in 2024.

Market Dynamics

• Market Shares: Google retains dominance in search with an 85% market share. Meanwhile, TikTok and X/Twitter are anticipated to gain shares in social media. The Trade Desk (TTD) is a key player in programmatic advertising, benefiting from the rise in CTV adoption.

Risks and Sentiment

The investment bank warns that fluctuating sentiment can be contra indicators. Although the current survey suggests heightened optimism in the industry, the analysts caution that failure to meet elevated growth expectations could pose challenges for 2025 digital ad returns. They note that previous ad revenue accelerations of 3% and 5% in the last two years may not be sustainable, with a projected deceleration of 300 basis points potentially being difficult to digest.