The ad industry would be forgiven for approaching 2023 with some apprehension. Inflation and economic instability have left marketers prepared for cuts to ad spend across all sectors.
Fortunately, if the latest market reports are anything to go by, many brands are aware of the importance of continuing to advertise during this time. According to Karan Singh, Head of Advertiser Partnerships Northern Europe at Xandr, while some caution is to be expected, there are huge opportunities on the horizon.
The rise of retail media
Innovative marketers have been busy tapping into identity solutions for the cookieless world, and one which is rising in popularity is retail media. By allowing advertisers to connect impressions to commerce transactions, brands can generate qualitative relationships with digital users, through privacy first methodology.
Retail media networks are not a new thing, but like everything else in marketing, developments in digital have taken them to a whole different realm. GroupM predicts retail media will hit $101 billion globally by the end of the year and $160 billion in five years’ time.
In 2023, we will almost certainly see more brands looking to develop their own retail media networks (RMNs). To be successful, these must be underpinned by extensive first-party consumer relationships. With many brands sitting on their own first-party data assets, the next step is activation, and brands can use this information strategically to develop data collaboration strategies.
Retailers will be seeking the right partners with solid data sets to enable them to scale their offering cross-channel, so it’s vital that brands make the most of the opportunities available to them through their first-party relationships. Importantly, as retail media networks gain traction, we will essentially see new walled gardens pop up as brands expand their own first-party data.
In the long term, it’s worth noting that brands who haven’t taken the first-party-centric approach, might struggle to generate a full view of their customer. At a time when consumer spending is unpredictable and winning ‘new eyeballs’ is likely to be harder, this could be a risk for brands in 2023.
Better ways of buying
The fragmented ecosystem is driving a popularity boom in the curated marketplace, which represent a significant evolution in programmatic advertising that benefits both the buy and sell-side. Publishers and data owners are able to effectively monetise their inventory and proprietary data, while brands are able to utilise this data to reach premium audiences at scale.
Crucially, brands can own their own curated marketplace, to develop a strategy that is directly based on their own priorities and bespoke ‘rules of engagement’. These marketplaces will improve operational efficiency by providing a centralised space for buyers to target and report across multiple DSPs, simplifying campaign execution.
Not only are curated marketplaces helping to bring more quality first-party data to market but they also provide greater transparency in a brand safe environment. As the industry continues to seek innovative solutions to the impending death of the third-party cookie, more and more brands will develop their own curated marketplace, enabling them to effectively reach consumers in these privacy-conscious times.
New inventory will help CTV overcome its challenges
The announcement of ad-supported tiers on Netflix and Disney+ is the news connected TV (CTV) has been waiting for. The IAB’s latest research shows that the highest increase in ad spend next year will be on CTV at 14.4%, which is most likely driven by these leading streaming services entering the market.
It’s not hard to see why CTV offers a great proposition for marketers. It enables them to target specific segmented audiences in premium TV environments while reducing wastage. Advertising on CTV is not altogether straightforward though, being a nascent channel it has encountered various issues in the way inventory is bought and sold, and campaigns are executed and measured.
However, collaborations in the industry are bringing far greater addressability to CTV and enabling brands to reach audiences on a bigger scale and across more inventory than ever before. What’s more, Netflix’s partnership with BARB is a significant first-step in enhancing measurement capabilities on CTV, and throughout 2023 we expect to see more partnerships cropping up in the ecosystem that help address the challenges of advertising on CTV.
Sustainability to dominate industry chatter
Consumer concern around climate change and sustainability is having a ripple effect across all industries and advertising is no exception. The industry has been forced to sit up and take note as it was revealed that digital now has a greater share of Greenhouse Gas (GHG) emissions than the aviation industry. With COP 27 demanding that all sectors of the economy play their part to reduce carbon emissions, advertising has to act quickly and all players in the ecosystem need to get onboard.
With 50% of UK consumers prepared to go out of their way to choose brands that create sustainable products or have sustainable production processes, more brands will be looking to partner with adtech providers with solid eco-credentials.
As platforms seek to address this quickly, there’s going to be a lot of chatter around sustainability in 2023 with industry events and talks dedicated to the subject. As with other trends for next year, sustainability will also encourage collaboration as companies work together to provide education and guidance on how digital advertising can be as sustainable as possible.
With preparations for a post-cookie world in full-swing and new solutions and inventory to take advantage of, 2023 will be awash with opportunities for advertisers. There will of course be challenges in the form of the economic situation and the imperative to implement sustainable practices.
But as has been proven many times before, the ad industry is resilient and we will see incredible innovation and internal collaboration to help counter these obstacles and ensure a successful 2023.