How is marketing going to be affected heading into 2023? 


Every year is a new opportunity to redevelop and re-think your marketing strategy. 2023 looks to be an interesting year where marketing will have to adapt to the global environment. The economic recession is predicted to last until the second two-quarters of 2023, energy and gas is in turmoil and the costs of email and digital marketing are also increasing. 2023 is going to be a challenge for marketers to make the most of their fluctuating budgets whilst having to navigate through the given circumstances. This blog will look into the UK economy outlook and suggest the best marketing investments for this uncertain era. 


New Year, New Recession

From July until September 2022 the UK’s economy shrank by 0.2%. If this trend continues and Q4 of 2022 also results in a shrink in the economy then the recession for 2023 will be official. The bank of England has predicted that 2022 will end with another quarter in recession and 2023, as well as the first half of 2024, will all be months in which the economy will continue to shrink. The BBC has also noted that the UK is bottom of the G7 for economic growth.

The IMF has recorded inflation rates that are higher than they have been in past decades as well as an unexpectedly sharp slowdown in economic activity. It is believed that the two main factors contributing to this economic slowdown are the lingering effects of the pandemic and the ongoing war in Ukraine. The ongoing conflict has led to increased gas prices across the UK due to a dependency on imported energy.


Importantly an economic recession will mean that global consumers will not be spending as much as they are used to. Businesses might need to adapt and begin cutting costs. On paper, this would sound worrying to marketers across the globe, as marketing budgets are often among the first few budgets to be slashed.



Costs of Marketing

Despite the fact that marketing budgets are usually prone to be cut, less than 29% of multinational companies in the WFA (world federation of advertisers) are going to be spending less on marketing. These large organisations are committed to their brands and will continue with their planned spending. Over-investing at the bottom of the sales funnel during an economic recession could have long-term consequences. Inefficient spending and high acquisition costs over a sustained period of time are the opposite of what most marketers are looking to achieve. If companies plan on spending the same amount on marketing in 2023 as they did in 2022 prices for digital ad space will only continue to rise. Firms competing over digital ad space and topping their consumer’s email inboxes will have to compete with each other by continuing to spend more. 


Digital Mail 

E-mail marketing is still considered to be one of the most cost-effective marketing methods and will continue to be popular with marketers in 2023. Demand for digital marketing and specifically e-mail marketing is continuing to grow due to its affordability and effectiveness, with 66% of small businesses relying on email marketing (Marketsplash, 2022). As more and more businesses continue to adopt email marketing the conversion rates are surely going to drop. Combining decreased consumer spending due to an economic recession with more businesses leaning heavily on email marketing could lead to a decline in conversion rates due to the competition. 


Despite this several statistics still suggest that e-mail marketing has been effective over 2022:


  • 63% of businesses reduce the frequency of emails sent to subscribers based on their levels of engagement.  (Databox, 2022)
  • 77% of marketers have seen an increase in email engagement over the last 12 months. (Not Another State of Marketing, 2021)
  • 43% of marketers are changing how they measure email performance because of Apple’s Mail Privacy Protection, and 24% aren’t making any changes for now. (Litmus, 2021)


Split in spends

In 2021 and 2022 trends suggested that digital marketing would take up 70% of average marketing budgets. However, as 2023 approaches the split between online and offline marketing has shifted towards equality. With 56% of marketing being online.

Out of this online marketing spend ⅔ of that spend goes towards paid ads across different social media and digital mediums. This is suggesting that onlineX marketing could become more expensive with more spending going to online ad space, and competitors could potentially drive prices to an unreasonable amount. An additional conclusion that the split in marketing spending brings forward is that offline marketing is making a comeback. Through direct mail marketing, channel marketers have a solution with a cost-efficient and highly effective marketing tool in programmatic direct mail.


What about Programmatic direct mail (PDM)?

Programmatic direct mail is an excellent marketing tool to cost-effectively retain consumers and get a high return on investment. Using the best aspects of digital retargeting (data) in combination with the strengths of tactile marketing (personalised letters) creates a perfect blend of cost-effective marketing and scale.  Achieve more by spending less is the first thing that comes to mind when trying to be cost-effective in marketing. PDM will always reach consumers at a relevant point in time so as to not overwhelm the consumer and spend unnecessarily on marketing which won’t have effective conversion rates. Mail that lands in the inbox at the right time will have higher uptake as seen by Paperplanes clients every day:

  • Soak&Sleep
    • 17.1% conversion in sales from customers mailed abandon
  • Allplants
    • The reactivation campaign had a 9% topline conversion rate for mailed customers 
  • Yougarden
    • 17% of customers mailed went on to make a first conversion

Programmatic direct mail relies on less volume of marketing to consumers making it cheaper than regular direct mail marketing. At the same time, PDM has higher conversion rates making it an excellent contender to be part of any marketing strategy in 2023.


Despite the economic state changing, and the global economy going into a recession, marketing efforts need to continue. Marketers should consider focusing on customer retention and cost-effective methods of acquisition. Combining digital mail marketing and PDM for a cost-effective retention and acquisition strategy.