As we say goodbye to one year and hello to another, NDA asked experts from all corners of the digital industry to look beyond the uncertain economic horizon, and point out areas where we can expect positive change in 2023. From the responses, it is clear that, thanks to technological advances, a renewed commitment to sustainability and an emphasis on efficiency, a brighter future for the sector is just around the corner.
How will companies further their sustainable efforts in 2023?
Luca Masiello, Advertiser Partnerships, Senior Manager, Xandr:
“The internet accounts for approximately 4% of the world’s carbon emissions. That’s a higher percentage than the aviation industry. Programmatic advertising has an opportunity to lead the charge in measuring, reducing and offsetting greenhouse gases, but there are many organisations that don’t yet have a plan in place for more sustainable ad campaigns. Education will be key in driving actionable blueprints for greener advertising moving forward and we can expect 2023 to be the year the industry doubles-down in making strides to educate all players on how to understand and address digital carbon emissions. Everyone across the supply chain has a role to play, whether it is a publisher prioritising sustainable solutions, an advertiser limiting the emissions in their campaign footprint, or a consumer learning about digital’s effect on the environment. The more we spread awareness of the internet’s digital footprint, the more easily we can reduce it.”
Townsend Feehan, CEO, IAB Europe:
“With Europe hit by its hottest summer on record, and a multitude of global natural disasters, 2022 hammered home that the time for aggressive action to cut CO2 emissions is now. With one calculation suggesting that the typical ad campaign emits around 5.4 tons of CO2, sustainability should no longer be viewed as a nice-to-have, but standard operating procedure.
“The industry’s carbon footprint is driven by a complex supply chain, with a large amount of energy consumed and emissions produced through the delivery and use of digital advertising. If the industry is to do its part to reduce this and help fight the climate crisis, then it will need to educate on, identify and enable significant efficiencies along the supply path. Thankfully, the sector is collaborating in this effort; the first step being to create harmonised sustainability standards and best practices, with specific focus on a consistent measurement framework and immediate action that all parties can take.
“If more industry stakeholders can educate and hold themselves and their partners accountable for the emissions produced in the delivery of digital advertising, in 2023 we will see the industry move toward more agreed practical standards. This includes better measurement and overall reduction of environmental impact.”
How will companies look to maximise efficiencies during this turbulent year?
Mateusz Jędrocha, Head of Upper Funnel Solutions, RTB House:
“The economic slowdown means brands will be more cautious about how they spend their budgets in 2023, meaning marketers will likely focus more on measurable results. Some will cut their budgets, but maintaining a presence has always proven to be a winning strategy for any brand that can afford it. Indeed, times of decreased media demand are a great opportunity to experiment with new partners who can guarantee brand growth and make use of a less crowded space.
“Simultaneously, marketers must rethink their data strategy to prioritise privacy-safe advertising using newer, more efficient targeting strategies. Users are gradually becoming more anonymous and conscious about the data they share and the expectations of regulators will be more specific to account for this. With the right platform, marketers will be able to still gain attention, while keeping their CFOs happy and protecting user privacy.
“In 2023, campaigns will be aimed at delivering business value. Whilst some brands will rethink their marketing strategy to balance short-term sales with brand growth, it’s been proven a number of times that brands who invest in their marketing during tough times are more resilient, and gain market share over competitors, who cut down marketing budgets. Therefore, now is the time to be brave and make those changes if you can.”
Amy China Wire, Head of Teads Studio UK, Teads:
“With channels such as Connected TV set to skyrocket in 2023, ad competition here will be extremely fierce. Marketers looking to maximise performance on these platforms will need to prioritise creativity, as only engaging and interactive ads will stand out from the crowd. Moreover, a recent study found that optimising the creative for the environment increased ad attention by 49%. This includes considering the appropriateness of creative optimisations to the intended channel. As a result, brands that focus on the look and feel of their ads, whilst ensuring the creative resonates on the right channels, will see strong strategic growth.”
James Sleaford, Chief Growth Officer UK, Incubeta:
“The economic downturn hitting the nation in 2023 will naturally put pressure on organisational budget planning, and despite all the evidence and analysis which tells us not to do so, marketing will find itself at the forefront of those tightening conversations. Ultimately this climate will drive a focus on efficiencies, which is no bad thing as there are opportunities in automation. The challenge will be balancing a sharp eye on efficiencies with the confidence to continue with long-term branding and privacy essential investments. Advertisers will need a robust data strategy to provide the insights and measurement which will guide them based on their own personal brand position and categories.”
Silke Zetzsche, Commercial Director, A Million Ads:
“We know addressability has been a staple in digital display for a number of years but as we move into 2023, it will become a big growth area across multiple formats and channels. This is because addressable content will allow agencies and brands to be more effective in both the buying and execution of content across single and multiple regions, whilst driving consistent branding and moment-based marketing. The ultimate goal will be to access all channels and formats with addressable content across a single buying platform with content production being as cost-effective as possible.
“Audio is the perfect channel to achieve this. This is because as a channel it has grown substantially over the last five years and the production of addressable audio content is incredibly cost-effective, and faster to produce when compared to its broadcast counterpart, video. With that in mind, I suspect that scaled and addressable audio content will be the norm in 2023 and beyond.
“Ultimately, however, measurement will be a big factor in supporting addressable growth and I predict that both agencies and brands will be looking into their own solutions to prove effectiveness within their own econometric models as well as external partners.
Vihan Sharma, EVP Global Sales, LiveRamp:
“Established Retail Media Networks continue to expand their influence across the global digital media landscape, picking up an increasingly dominant share of ad spend compared to other channels. Expected to reach $101 billion in global annual revenue by the end of the year, a rise of 15%, we’ll see even more CPG ad dollars being funnelled here in 2023.”
“Driving this growth is the demand from brands for media channel accountability and measurable return-on-investment. Indeed, in an economic climate where every media dollar is scrutinised, the ability to connect the data pathway between consumer ad exposure, purchase, and beyond, is invaluable.
“Tesco Media and Boots Media Group are leading the way, but we can expect more and more retailers, especially those which are data-rich, like grocers, to launch their own networks. Using their existing first-party data in a privacy-first and secure way to create a lucrative, new revenue channel.”
Matt Nash, UK MD, Scibids:
“Economic uncertainty, the increasing fragmentation of the media landscape and its drive toward greater privacy will see brands make efficiency of ad spend a priority in 2023. As a result, there will be a tangible shift in focus toward the ad stack, as marketers look to maximise both performance and cost effectiveness. Artificial Intelligence (AI) solutions will be key to achieving this, especially customisable algorithms. This is because they can utilise privacy-compliant user data to inform custom-media buying, significantly improving reach and productivity.
“In addition, it will play a big part in reducing carbon emissions. As more brands make sustainability a key business objective, AI’s ability to reallocate budgets in real time will spell the end to the ‘spray and pray’ tactics which have been so detrimental to the industry’s carbon footprint. Instead, by selecting fewer but higher quality impressions, AI can ensure being green does not come at the detriment of performance.”
Ned Jones, Head of Advertiser Customer Success, Permutive
“In 2023, reachability will begin to overtake addressability as the new key audience metric for brands.
“As if the various data privacy laws that will go into effect in 2023 aren’t indication enough, consumers are already taking matters into their own hands: browsing in cookie-blocked environments (such as Safari & FireFox), or independently disabling cookies, already renders 70% of consumers on the open web unreachable to advertisers today.
“Reachability places emphasis on an advertiser’s ability to access their target audience outside of the over-saturated 30% of the open web, where the large majority of traditional programmatic buying practice is focused today.
2023 will begin to usher in a new way of buying and selling media; one that acknowledges the reach problem that exists today and works proactively to prioritise consumer privacy while driving revenue for advertisers and publishers.”
What technological advances can we expect this year?
Heather Lloyd, Head of Product Marketing, Nano Interactive:
“In August, Gartner announced helpful insights into advertising trends it expects to see in future, including around AI and contextual advertising.
“First, Gartner highlights emotion AI, which it interprets as understanding users’ emotions, though this concept is questionable from a privacy perspective. Instead, true potential in emotion AI comes by switching focus to context, measuring sentiment in the moment.
“The second trend is generative AI, such as DALL-E, which uses AI to generate creative images, based on command prompts. An example of a commercial application involves allowing advertisers to understand the different models belonging to a specific car brand – but also which of those models compete with other brands’ car models, all achieved via machine learning.
“Whether for media planning, or creative, the applications of and options around AI are growing. 2023 will be the time we take experimentation and understanding in this area to the next level.”
Ian Liddicoat, Chief Technology Officer and Head of Data Science, Adludio:
“Subject to the impact of the impending recession, alongside geopolitical strife and energy crises, it is likely that IT spending will remain static for 2023, not increasing until 2025. However, rather than spelling a slow down of technological innovation, what we will see next year is existing technologies converge and become “mainstream.” Robotics, VR, AI, IoT and 5G, for example, will all become more widely integrated, delivering richer experiences to consumers and faster, more agile solutions for businesses at a cheaper cost.”
“What will this mean for the advertising industry? Well, we can expect that AI will become commonplace for campaign optimisation as well as design, with some brands taking this in-house. Others will leverage third party, AI-led platforms. As a result, traditional, creative, network agencies will struggle to achieve historic levels of profit growth as digital campaign delivery becomes more heavily commoditised and automated through these more nimble solutions.”
Matt Parsons, Head of Gaming UK, Azerion:
“Gaming has grown tremendously in 2022 and is expected to be worth $321 billion by 2026. Consequently we’ve seen more partners request it as a pillar for their advertising solutions this year. With that comes further scrutiny, and 2023 will ask more questions about measurement, as advertisers seek concrete proof points behind their campaign planning.
“Outside of ‘Casual Gaming’ and Immersive AAA experiences, I anticipate we’ll see eSports battle the metaverse for the lion’s share of brand interest and investment. Similarly, the cost of living crisis is likely to delay the adoption of VR-led metaverses as consumers look for cheaper alternatives.
“One thing won’t change in 2023, and that’s the need for brands to reach their audiences. Ultimately, gaming will continue to deliver huge scale for brands looking to engage with these audiences within a dynamic, highly engaged, and personalised environment, Complimenting their existing digital strategies”
*All the above companies are clients of Bluestripe Communications, owned by Bluestripe Group, the owner of NDA.