Will Cybersecurity PR and Marketing Budgets Take a Hit in 2023?

Public relations (PR) is often not prioritised in the security sector until a crisis breaks out. The significance of cybersecurity PR and marketing is not equally recognised by every organisation, even though this mindset is constantly changing every year. That’s why when it’s time for budget cuts, PR and marketing are often the first to take the axe. 

The second half of 2022 was critically challenging for the cybersecurity sector due to the global economic downturn. So, security vendors, as well as marketing agencies, are constantly wondering how marketing budgets will change in this financial year. 

In this blog, we will explore some of the important factors influencing marketing spend in the sector. By understanding this, both security vendors and marketing agencies will be better placed to project and apportion future expenditures throughout this year and beyond.

How will cybersecurity fundings change in 2023? 

Last year, security vendors raised over $22 billion in funding. It was one of the most successful years in terms of raising VC funding for cybersecurity firms. However, the economic turbulence and potential recessions across many key global markets are forcing companies to cut back and rethink their budgetary strategies; basically trying to do more with less.

The coming financial year will likely be one of uncertainty and challenges for many organisations in the industry. One potential reason is that this influx of available funding will likely reduce. We have seen record investments in 2021 and 2022. So, VCs will tend to hold back on further investments and assess the current challenges.

Consequently, less funding means less spending freedom for companies. Ultimately, this will reflect on cybersecurity PR and marketing budgets. 

VC investments are critical to cybersecurity PR and marketing budgets

VC investors provide much of the fuel that fosters innovation in the cybersecurity industry. In recent years, funding levels have increased year on year, leading to rising company valuations and budgets as cybersecurity companies compete for growth and market control. In 2021 alone, there was a recorded growth of 144% in VC funding compared to the previous year.

This growth allowed firms to allocate their budgets more freely across different sectors of the business. As a result, we have seen PR and marketing budgets continuously grow throughout the last two years. 

Source: Crunchbase

However, as the general economic downturn continues and interest rates rise, many investors are moving away from high-risk/high-return opportunities. They are instead investing in broader markets to safeguard their assets and capital. In 2021, VC startup funding was estimated at $22.8 billion for the cybersecurity sector. This decreased by over 30% to $15.3 billion in 2022. 

This trend has continued into the current financial year, forcing many leaders to recalibrate their budgets– including a reduction in marketing and PR expenditure.

So, if you want to track how the cybersecurity PR and marketing budgets will change throughout 2023, keep a close eye on the major VC investors. We are projecting a challenging period ahead, hopefully levelling off as we move through the new financial year. 

But not all companies are in the same boat. Those that rely heavily on VC funding will continue to struggle and experience financial fatigue. On the other hand, well-established firms are in an excellent position to ride this wave successfully. Such companies will look for more proactive strategies to control marketing expenditure, for instance, consolidating third-party services, cutting down on trade show and conference expenses, and pausing resource-heavy operations. 

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