The advertising and marketing industry faces a year of growth and transition. The demise of third-party cookies will challenge marketers to get more creative and resourceful in how they advertise, but the rise of AI will create opportunities in areas such as video content. Moreover, the explosion of connected TV continues to open doors for businesses to connect with audiences as they leave linear TV for the world of streaming.
Advertisers and marketers who are resourceful and willing to experiment carefully will succeed. Businesses that capitalize on emerging tools will flourish so long as they manage their expectations and ensure that people manage the tools, not the other way around. But one business that faces a potentially tough year is Google. Will a transition of its ad business to AI-based tools and turbulence on its ad team slow down the search giant as users continue to spread their attention across apps ranging from TikTok to Instagram?
For more insight, read our fearless predictions for 2024.
The Demise of Third-Party Cookies Will Force Marketers to Be Resourceful
— Mark Smith, Co-founder
We’ve been talking about the end of third-party cookies for some time now. In 2024, we’ll finally see their demise as Google makes good on its commitment to deprecate them on the Chrome browser as Apple did so already on Safari. Third-party cookies are pieces of data stored on a user’s browser by websites other than the one they are currently visiting. They have long been a fundamental tool for advertisers, enabling cross-site tracking and targeted advertising. In an increasingly consumer privacy centric world, major web browsers either phased them out or announced plans to do so. Chrome is by far the most popular web browser.
There are several impacts to advertisers, starting with a shift toward privacy-centric advertising. With third-party cookies no longer in play, advertisers must adopt more privacy-centric advertising practices. This shift emphasizes the importance of first-party data, fostering direct relationships with users, and respecting their privacy preferences. Advertisers will face challenges delivering highly targeted ads as the traditional user tracking methods.
First-Party Data: More Critical
The usage of first-party data will be more critical than ever in 2024. Brands are now prioritizing strategies to collect, manage, and leverage their own customer data, fostering more direct and meaningful connections. This is one reason why retail media networks such as Amazon Ads and Walmart Connect are growing in popularity. They use the first-party data collected by their parent retailers to sell ad space.
Advertisers Will Get More Resourceful
Advertisers need to get resourceful in other ways to target their audiences. For example, contextual and cohort targeting models have gained traction over the last few years. Contextual advertising, based on the page’s content rather than individual user behavior, is gaining prominence. Additionally, as introduced by Google’s Privacy Sandbox, cohort-based targeting enables advertisers to target groups of users with similar interests. Advertisers are also exploring advanced attribution models that rely on aggregated and anonymized data, moving away from the reliance on individual user tracking.
We also expect to see more diversification in advertising strategies. Marketers will diversify their advertising channels, exploring alternatives such as influencer marketing, email marketing, and partnerships to reduce dependency on cookie-based tracking.
The Meta Example
To appreciate how a brand can adapt to the demise of third-party cookies, look at Meta. The company suffered a major blow when an Apple OS update resulted in Meta losing access to third-party data required to sell targeted ads. Meta’s ad business suffered a major hit in 2022. But by late 2023, ad revenues rebounded strongly. This is partly because Meta invested heavily in refining its ad targeting algorithms with the help of AI, allowing advertisers to reach highly specific audiences with greater efficiency. This led to better campaign performance and increased advertiser interest.
True Interactive can help advertisers embrace privacy-centric practices, prioritize first-party data, and explore innovative alternatives.
Platform Diversification Will Create Leaders and Followers
— Kurt Anagnostopoulos, Co-founder
Digital marketers have been spreading their budgets around to more and more platforms over the years, and I think that trend will accelerate in 2024. Gone are the days when marketers had two simple choices of Google or Facebook to invest their advertising spend. Users are consuming more content across more platforms. Advertisers need to be where consumers are. Google reported that roughly 40 precent of Gen Z is using TikTok and Instagram for search instead of Google, and Amazon trumps Google for product searches. And although Snapchat gets less attention than TikTok these days, Snapchat messaging is still more popular among Gen Z than TikTok is.
With linear television decline and streaming rising, connected TV is grabbing more share of consumers’ attention. This is why the big streaming companies such as Netflix have introduced advertising-supported tiers. Meanwhile, apps such as Pinterest continue to grow (and become stronger advertising destinations).
Google Responds Poorly
Google has responded to these trends poorly. Google has become less transparent, less flexible, and less helpful in an effort to drive more revenue. Every year we lose more transparency and more flexibility on the Google platform. 2024 may be the worst year yet. We are hearing that we will to lose the ability to advertise directly on the GDN and will need to use Pmax campaigns to place ads there, but time will tell.
As my colleague Samantha Coconato points, Google has been subjected to a rise in customer service complaints. Those are only going to worsen in light of the company cutting its advertising staff. Some companies improve offerings and customer service as competition increases. But Google is doing the opposite and is looking for customers to just give Google their money and let Google put it where Google wants. This approach could hurt Google in the long run.
Advice to Marketers
My advice to marketers: refine your audience segments and diversify your spend accordingly. Just because TikTok has exploded in popularity, it doesn’t mean you should invest ad dollars there. The decision depends on your customers’ journeys from awareness to conversion and how multiple digital touchpoints influence that journey.
Video Content Will Be Altered Forever
— Bella Schneider, Senior Digital Marketing Manager
With the expansion of AI, I predict we will see brands and content creators relying more on AI to create videos. Creating video content has been a challenge for some brands who do not have in-house resources, nor funds to hire an influencer. With the growing advancement of AI, this challenge diminishes.
For example, companies like RunwayML offer tools that let you turn text descriptions into compelling video ads. Just imagine typing “a futuristic cityscape with flying cars” and getting a short video clip for your brand’s campaign. Platforms like Synthesia allow you to create realistic talking avatars that can deliver your message or even act in short explainer videos. This is perfect for influencers or brands who want to create personalized content without being on camera themselves. Tools like Plotagon allow you to create animated characters and scenarios from scratch, even adding realistic voiceovers and dialogue.
The means of production are no longer contained. On top of all that, the popularity of video on apps such as TikTok, YouTube, and Instagram is already pressuring brands to improve their video savvy. They can do so faster and less expensively than ever. But just because you can doesn’t mean you should. Advertisers will be need to resist the temptation to simply create videos because of the popularity of the format. Great ideas and execution are more important than using video for the sake of video.
Connected TV Advertising Will Take Off
— Timothy Colucci, Vice President
I’ve been following the rise of advertising on connected TV (CTV) for years. I’ve never seen this sector poised for so much growth in a single year. A number of forces are converging to turbocharge CTV advertising. One of them is the launch of more ad-supported streaming tiers on prominent platforms such as Disney+ and Netflix. Ad-supported tiers have existed on sites such as Hulu for years. The majority of streaming users (56 percent) prefer cheaper streaming subscriptions with ads. That hasn’t changed much in the last few years. But it shows that CTV via streaming services continues to have opportunities for advertisers.
Disney+ and Netflix launched ad-supported tiers in late 2022 and are just beginning to grow those businesses. They will hit their stride, partly because they are launching new content. Example: live sports (which is very appealing to advertisers), as Netflix is doing with World Wrestling Entertainment. And watch what happens when Amazon Prime moves towards limited ads in movies and TV shows. This will open up a lot of users to additional ad impressions. (And on a related note, the limited ads being added will help Amazon cover the $11 billion cost to acquire Thursday Night Football rights from the NFL). On top of that, it’s estimated another 5 million people cut the cord in 2023. This opens up a larger audience for streaming services. Advertisers will follow their audiences to CTV and unlock more revenue in 2024.
A Breakout Year for Broad Match Keywords
— Beth Bauch, Director
It’s going to be a big year for Broad match keywords in the Google Ads Platform. Broad match is a type of keyword match that allows your ad to show on a wide range of searches, not just those containing the exact keyword terms. Think of it as casting a big net to capture as many relevant searches as possible. Google has invested significant time and investment making improvements to the algorithm’s matching ability for broad keywords. This results in more refined and relevant search queries while still increasing reach.
Most marketers will tell you that they avoided using Broad match keywords in the past due to the poor-quality traffic they generated and because they spent their budget faster than they would have preferred. (Because broad keywords match to a much larger pool of search queries versus exact or phrase, ads show far more often and can generate clicks/spend much more quickly.) However, at True Interactive, we have been testing the use of the newly refined Broad match keywords paired with Google’s Automated Bidding strategies. In many cases we found them to be successful in generating conversions with impressive cost/per conversion metrics. Average cost per click tends to be lower with Broad match versus Phrase or Exact Match. So long as conversion rates are similar, you could see improved efficiency in your campaigns.
It is of utmost importance that Broad match keywords be monitored closely and that negative keywords are consistently added to ensure the search traffic remains relevant. Also,Broad match keyword performance varies by vertical. So we recommend testing before committing to a broad keyword strategy.
A Year of Transition for Google Ads
— Samantha Coconato, Digital Marketing Director
Advertising remains critical to Google’s growth and market value. So, the effectiveness of Google Ads for Google customers is closely linked to Google’s success overall. And Google Ads faces some challenges but also intriguing opportunities. On the one hand, the Google Ads team continues to be the subject of vocal customer service complaints. Levels of customer support might deteriorate in light of Google trimming the Google Ads staff. Perhaps the layoffs are not surprising, though.
Google Ads continues to automate and inject self-directed AI features. For example, Google just announced that Google Ads is introducing a conversational experience powered by Gemini AI to help advertisers create better search campaigns. Google will now make it possible for marketers to use chat to help build campaigns. And Google Gemini suggests images tailored to the campaign. But equally intriguing is how Google’s injection of generative AI into the user search experience might affect Google Ads and performance marketing more generally. Google’s Search Generative Experience (SGE) uses conversational AI to summarize search results instead of sending users to a list of links for more information. SGE likely keep users more engaged in Google Search (and less on websites) because the conversational experience means fewer links to websites.
No one knows exactly how ads will be served up in this conversational interface. Right now, ads appear above and below SGE conversations. But they could be embedded even more naturally. We advise clients to stay closely involved in any advertising product that relies on AI. Humans need to monitor performance and course correct when needed. A set-it-and-forget-it approach may result in disappointing returns.
Contact True Interactive
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