The advertising costs have sharply increased, and it is predicted that the US advertising search expenditure will reach a record high in 2023!

US advertising search expenditure will reach record high in 2023 due to sharp increase in advertising costs

According to the latest eMarketer forecast, the US advertising search expenditure is expected to reach a new record of $110 billion by the end of 2023.

Source: eMarketer

According to eMarketer’s latest report, this year will mark the first milestone for the US brand search industry to exceed $110 billion. Online marketing expenditure in the US is actually growing at a rate of 8.2%, slightly higher than the original plan.

Retail media networks (RMNs) are a rapidly expanding area in the search industry. It is expected that by 2023, retail media search spending will increase by 18.7% from the current level, reaching nearly $30 billion.

Source: eMarketer

If spending continues to grow, digital advertising revenue for RMN could reach $106 billion by 2027.

Considering that sponsored search accounts for 41.8% of total spending, it’s not surprising that digital advertising costs are expensive.

As consumers increasingly use the internet for product research and purchases, companies are investing more and more in search advertising. In order to stay competitive and increase sales, brands have found it crucial to advertise on pay-per-click search platforms such as Google Ads and Bing Ads, and this trend has become even more important with the emergence of new platforms such as SHEIN and Temu.

Especially with the breakthrough development of Artificial Intelligence Generated Content (AIGC) technology, innovative dialogues on Google and Microsoft Bing are expected to cause changes in the search field. This provides sellers with more choices to optimize their advertising campaigns for better results and return on investment.

Source: the internet

For cross-border e-commerce, this trend has a certain impact on costs and benefits.

Regarding Costs:

Increased advertising spending: The increase in advertising costs means that cross-border e-commerce companies need to invest more funds in advertising and promotion. They need to purchase more advertising space on advertising platforms and pay higher fees. This may increase their operating costs.

Increased competition: The increase in advertising costs also brings intensified competition. More sellers and brands are willing to invest more advertising funds to compete for limited advertising resources and exposure opportunities. This may cause further increases in advertising costs, increasing the competitive pressure and advertising costs of cross-border e-commerce.

Regarding Revenue:

Increased brand exposure and awareness: By increasing advertising costs, cross-border e-commerce companies can gain more brand exposure and awareness. The increased advertising may attract more target consumers, improve brand visibility and awareness. This may encourage consumers to be more inclined to buy the brand’s products or services, thereby increasing sales and revenue.

Sales growth: More advertising may lead to an increase in orders and sales. Through effective advertising strategies and optimization, cross-border e-commerce companies can attract more potential consumers and convert them into actual buyers, thereby increasing sales revenue and profit, but this is an ideal scenario.

For brand sellers who only use independent websites and other self-owned channels, search advertising is an important means of increasing website traffic and promoting conversion. By increasing advertising investment, they can attract more potential consumers to visit their website and convert them into actual buyers, thereby increasing sales and profit.

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