Following years of curve balls, industry player resilience has been repeatedly tested. And we have noticed a tendency to focus on isolated events, which in turn led to skewed and negative perceptions. For Sir Martin Sorrell, “doom and gloom” sparked by Twitter jitters should be balanced against its modest 1% share of global ad revenue. Meanwhile, GroupM has been keen to emphasize that global ad spend is still due for 6.5% growth next year, even after downgraded forecasts. The general mood is leaning towards bigger picture thinking to ensure a realistic view on current prospects and conditions; and it’s one leading forces across the ecosystem are taking to heart.
Alongside recognition that the next 12 months will likely bring more financial turmoil, there’s optimism about finding ways around challenges and harnessing emerging opportunities; from tapping diverse connected TV (CTV) inventory to eliminating internal efficiency barriers.
1. Despite fragmentation, CTV remains fertile
Quality ad inventory could increase as platforms test new monetisation models
“Subscription-based apps and platforms will likely face challenges in the near future as consumers become more reserved about their spending. Cutting subscriptions could be one of many ongoing trends we see from users seeking to minimise their monthly outgoings. This year, we’ve already witnessed Netflix lose subscribers and announce its discounted, ad-supported tier in response.
“Other subscription-based apps and platforms may also consider alternative monetisation models, such as in-app advertising (IAA), which could open up inventory for advertisers and present them with highly valuable opportunities. Subscription-based apps are often home to quality content, such as video, podcasts, and educational courses, and typically drive strong levels of engagement. If these apps begin exploring IAA options, advertisers will be able to reach audiences through impactful environments.”
Sports is ready for a larger streaming game
“Next year will see live sports regularly cross 10 million concurrent viewers in the US, as the streaming giants carve up the rights to linear TV’s last big bastion. In Europe, the stress test of the World Cup has proven to media companies that internet infrastructure is capable of taking on the load of live sports without the system breaking. BBC iPlayer matched linear for viewing numbers for the first time in the UK, while high streaming intent among millennials gives a clear forecast of where sports will be viewed in the future. Meanwhile, on the other side of the pond, all eyes are on which of the streaming giants scoops up the NFL’s Sunday Ticket in an effort to differentiate their packages in the fiercely competitive streaming market.
“Streamed sports not only opens a multi-million audience up to advertisers, but also provides measurement, personalisation, and attribution capabilities far beyond what was possible in linear broadcasting thanks to the abundant real-time data and dynamic inventory of CTV platforms. Brands go where they can connect with customers, and with both scale and detail on its side, sports streaming is sure to be a core pillar of ad spend in the years to come.”
Digital and linear remain better together
“Broadly speaking, spend will continue to be reallocated away from offline advertising, while digital channels see budgets boom, with marketers drawn to the activation flexibility and more efficient targeting and ROI reporting. Although this is also true for CTV, with budgets expected to expand on this platform in 2023, there will be a more incremental balance between Linear TV and CTV.
Prudent marketers will continue to supplement CTV budgets with Linear TV investments, as both coexist in the market due to generational viewing differences. The traditional Linear TV model is typically preferred by an older demographic and is well suited to brand awareness exercises; in contrast, CTV, while appealing to a range of demographics, can also offer marketers the potential to target niche segments of their audience. This evolving symbiotic relationship between the two channels means marketers must utilize a marketing tech stack that can sufficiently integrate both planning and reporting from each TV type to optimize the budget split.”
Growth fuels division and premium options
“The next 12 months will see more channels emerge and mature in the premium video ecosystem, further diversifying the landscape. This – coupled with the ongoing demand from viewers for access to quality content, regardless of which device, platform, or channel they use – will create both challenges and opportunities for marketers in 2023.
“One example of this is the rising number of free, ad-supported streaming services, which will lead to further audience fragmentation, but will also expand the pool of premium video inventory available to ad buyers. Advertisers and agencies will need to focus on frequency management and deduplication as they prioritize extending reach, which was seen as the top driver for campaign effectiveness by 45% of respondents in our recent AudienceXpress marketer survey.”
2. Sustained evolution requires tireless agility
Marketers need to achieve short-term results and build long-term value
“In 2023 marketers should focus on investing for short-term results and long-term value. Achieving both of these goals simultaneously and successfully requires building a culture of innovation where teams are encouraged to experiment continuously to identify value-driving processes and technologies.
“Whether it is using custom algorithms for more efficient media buying or new privacy-protecting data practices, it’s only through continuous experimentation that marketers can maintain the always-on transformation needed to achieve short-term results in a difficult economic environment, while ensuring the business is best placed to compete in the long-term.”
Marketers can get more for less with omnichannel strategies
“A key focus going forward will be on how multichannel campaigns will evolve with omnichannel capabilities. Marketers will want to make in-flight optimizations and measure performance in a unified way, not only by reaching audiences through screens (multichannel) but also by filling in the missing links between screens and platforms.
“We are going to see the continued phasing out of siloed media channel buys as part of siloed performance and optimization strategies. A more holistic approach will be deployed as marketers buy across multiple channels through a single point of entry, and then optimize to the channel or channels delivering the best performance, which simultaneously improves efficiency and boosts results.”
Flexible marketing bolsters visibility
With the multitude of ongoing global affairs pulling audience attention, marketers need to demand greater campaign flexibility and efficiency if they are to continue to cut through the noise. Moving into 2023, marketers need to take a more holistic view of their campaigns and implement cohesive messaging through omnichannel activation. Emerging channels such as Connected TV (CTV) and digital audio increase the potential for these campaigns. Programmatic digital out of home (DOOH) allows marketers to merge offline and online environments, not only looking beyond automation, but supplying campaigns with greater targeting, flexibility, and measurability for DOOH activations, ensuring that no budget is wasted.
3. Holistic oversight powers better decisions
Data connection supports strong performance
“As 2022 draws to a close, an unsettling forecast from Gartner states that 60% of CMOs will cut marketing analytics departments by half. But, in the face of strong economic headwinds, slashing potential access to data-driven insights presents a risk to campaigns, depriving marketers of their campaign navigation tools.
“Moving forward, it will be important to overcome the challenges preventing marketers from unleashing the full value of available data and resources. Instead of onboarding technologies in an attempted fix-all approach or even integrating more data, marketers must switch their focus to refining what they already have. Regardless of how sophisticated technologies become, the fundamentals of data orchestration haven’t changed; sorting, analyzing, linking, and visualizing data builds the runway for informed marketing strategies.” By optimizing and streamlining these fundamental components, marketers will be able to ensure that analytics does indeed deliver on its promise to improve campaigns and ROI.”
Forging ahead with people power
“With both personal and professional pressures likely to continue weighing on workforces, we’ll see businesses refine the initiatives and practices that appeal to their staff in 2023. Retaining talent will be the most important focus for business leaders, who are more than twice as likely to rank retention as a priority (20%) than cutting costs (9%).
“But for industry players with international operations, there won’t be a one-size-fits-all solution for ensuring they retain talent, as cultural nuances influence each element of an effective retention strategy. Take feedback as an example. Depending on where teams are based, the way feedback should be given and is received changes. In the US, for instance, staff tend to be motivated when their successes are continually recognized, while in Singapore, immediate feedback is considered highly important so teams can act on it straight away.
“Taking the time to understand and account for these subtle differences will be critical for brands, agencies, and technology businesses as they look to hold onto top industry talent in the coming year.”
Evolving the marketing team model
The roles and priorities of marketing departments have started to expand, particularly when considering activities related to social media. Social has become increasingly present in marketing plans, thanks in part to the diversification and evolution of the formats and functionalities available to marketers, and also the shift of audiences.
It’s therefore crucial that marketing departments break any existing silos between creative and data teams to ensure that all content is developed based on learnings, and harness the tools needed to optimize campaigns in flight to achieve maximum impact on all social channels. To do this, we expect to see new, hybrid job roles, particularly dedicated to developing the ‘Creative Intelligence function’.”
Staying ready to roll with fresh disruption will be vital in 2023, and likely beyond. Keeping both campaign performance and the bottom line steady, however, will also call for level-headed assessment, with buyers, sellers and vendors taking time to understand challenges in context, and identify smart solutions.