In 2022, pandemic-driven trends thought to be permanently turned out to be anything but, and a tightening economy caused digital whiplash. This year will show if the changes in the industry are good for the long run: Will streaming with ads take the place of TV? Can third-party cookies and quantification currencies be replaced by something else? What use does the metaverse have in the real world?
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| 5 marketing trends to observe as 2023 puts transformation bets to the test |
At the same time, the Microsoft-Activision and Kroger-Albertsons deals are in the regulatory hot seat, which means that big companies might get even bigger. Apple's reach will grow, hurting struggling technologies like Meta, and retailers will grow their media networks to take advantage of how money is moving toward performance.
Since COVID-19 started, there has been a cloud of uncertainty over marketing, but unlike earlier in the pandemic, when online engagement was high, and war chests were full, marketers are tightening their belts in 2023. As more and more things, like BeReal and TikTok, try to get people's attention, consumers will choose simplicity and usefulness, which raises the stakes even more.
"In the next year, I think the retail media networks, as well as technology and ad products, will continue to spread across the market. Dave Kersey, chief media officer at GSD&M, said, "Consumers will look at it the other way and start limiting where and when they consume." "There are many ways to reach people, but people are starting to focus on fewer of them."
Customers embrace the 'posture of prudence.'
Customers have had a hard time. First, they had to deal with the pandemic, and then they had to deal with inflation, war, and fears of a recession. J. Walker Smith, Kantar's chief knowledge officer of brand and marketing, said that people's moods were down in 2022 but that most of them were also strong. Still, people are being more cautious because they don't know what's coming next. One executive called this a "posture of prudence."
Smith said, "When we got to December, we saw that people were more worried about where the year would take them." "And there are still many unknowns."
For advertisers to reach consumers in 2023, they should focus more on strategies that have already worked, such as messaging that focuses on good value exchange. This helps lessen the urge to take risks when things are uncertain. Smith also said that brands should "align themselves with positivity," from the point of view of their messages and of making logistics easier.
Smith says it will still be important to give people a more human experience, a desire that grew after the pandemic restrictions were lifted. Emotional appeals will be more effective than strict functionality. Companies should put sustainability, diversity, and inclusion at the top of their core values as long as aspirations for representation remain firm.
CMOS has to make less money to go further.
CMOS may not have enough resources in 2023, but tools that look to the future promise new efficiency. Artificially intelligent (AI) software like ChatGPT has become more popular, so marketers need to ensure that AI is used ethically. For understanding groups like Gen Z, new channels that are hard to track or "dark," like Discord, will be more important.
"Money shortages create silos and conflicting duties."
After big events like the Supreme Court's decision to overturn Roe v. Wade, CMOs must be careful about what they say. As inflation is at the top of the list of things to worry about, the role will also have more to do with sustainability and packaging.
"Camilo La Cruz, chief strategy officer at Sparks & Honey, said, "More often than not, it comes from CMOs trying to predict value shifts that could be caused by economic worry."
This means that CMOs will have to wear many hats and deal with a high turnover rate, making it hard to carry out long-term strategies. Given the situation, it makes sense to want to stay alive.
Ewan McIntyre, VP analyst and chief of research at Gartner's marketing practice, said, "A tough financial climate does create silos and people who may work against one another across functions."
Recent Gartner research confirms that marketers who say they work together often do worse than those who work alone. But McIntyre says that the result isn't always that being independent is more valuable.
The power of retail media grows and gets stronger
Retail media will grow in 2023 as marketers look for a more direct link between ad impressions and sales during an economic slowdown. This year, spending is expected to go up by 10.1% to $122 billion worldwide. This makes it the fastest-growing media channel. Following Marriott's example, the idea will spread to other categories and layouts like television Sets (CTV).
"It's hard for advertisers to keep track of all of these partners."
But the growing pains that retail media had last year will also get worse. Some marketers will change their plans after putting too much emphasis on performance and giving up some control.
Kersey from GSD&M said, "In 2023, we hope to see a better balance between brand and performance."
A more systematic approach to general merchandise media could lead to fewer players having more power. Brick-and-mortar giants already control the market, and the possible merger of Kroger and Albertsons shows how important data at scale is. A few retailers are also bringing their operations in-house, which makes it harder for the partner ecosystem to work.
Lori O'Neal, director of global consumer and retail packaged goods strategic plan at LiveRamp, said, "It's hard for advertisers to keep track of all of these partners." "They will eventually choose their top 10 or top 5."
Even though the Kroger-Albertsons deal is big and could be challenged by regulators, other retailers may look to ad tech to complete their infrastructure and talent.
"It's likely that both buyers and sellers think valuations are more realistic in 2023," said Sean McCaffrey, CEO, and president of GSTV. "I think there will be a new deal market in 2023."
And data-driven partnerships, like the new one between Walmart and Roku for e-commerce, may become more common as marketers realize that combining resources gives them better insights.
Different social strategies are used to build trust and collect data
Consumers have shown that they are willing to go beyond the status quo of social media in search of exciting new options. This has made it possible for apps like TikTok and BeReal to exist. Advertisers will bet more on user curiosity in 2023, choosing to try out a wider variety of platforms as big names like Meta and Snap start to lose steam.
Amy Rumpler, vice president of search ads and social for Basis Technologies, said, "We see a lot of people in a lot of various verticals really thinking outside of the box."
TikTok's short, punchy video format will still be popular on social media in 2023, but it won't be at the expense of long-form video, said Rumpler. He thinks short videos will get people interested in longer content, which will then be delivered.
Rumpler said that the end of third-party cookies could lead to more money spent on social ads and more talk about the channel's targeting and measurement problems. At such a crucial time, Twitter will get less attention because of problems caused by Elon Musk's sudden takeover.
Cookie devaluation deja vu
Marketers have been looking for ways to safeguard their data investments ever since Google first said it would get rid of third-party cookies and then changed its mind. Experts say that 2023 won't be much different in the big picture, but new solutions will become clear.
John Puterbaugh, general manager of BlueSoHo, a division of Quad, said, "I think third-party cookies will be pretty much the same as they are now by 2022." "Everything will have to do with first-party cookies."
Attribution and quantification will become more important in 2023, especially since third-party cookies may become useless when they are completely phased out. Mathieu Roche, co-founder, and CEO of ID5, says that cookies cannot track 40% of the world's Internet traffic.
There are likely to be a lot of new answers to the measuring device and attribution question. For example, The Trade Desk launched Galileo at the beginning of January. Its goal is to provide accurate data activation across all channels. Data clean rooms are also likely to become more popular now that big companies like Amazon and Disney are getting better at what they do.
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