2023 Advertising and Marketing Predictions
Gather around advertisers, pull up a comfortable chair, and take a look at our advertising and marketing predictions for 2023! We take on some big topics, ranging from the rise of AI to the impact of the economic downturn. Oh, and TikTok and Twitter, too. Check out our predictions, and let us know yours!
The Economic Downturn Will Present an Opportunity
— Kurt Anagnostopoulos, co-founder
This is a time for companies to make smart decisions about their marketing spend. We’re clearly in an economic downturn. Over the next six months, the downturn will intensify although not to the extent of the Great Recession of 2008. When downturns occur and uncertainty happens, inevitably some businesses scale back on their marketing spend. History has demonstrated time and again that during lean times, the cost cutters lose out to the businesses that continue to invest in their brands. Companies that stay the course will come out the other side of the recession ahead. If you are smart about how you market and price yourself, you can leave your competitors behind when times are tough. It’s not necessarily about doubling down on marketing, and it’s not about cutting at the other end of the extreme. It’s about spending wisely.
A mentality of spending wisely could hurt the major ad platforms such as Google and Meta. They’ve become more expensive. With advertisers seeking to spend more wisely in 2023, Google and Meta might price themselves out of the running in favor of platforms that deliver better CPCs and performance for the money. An agency such as True Interactive can help businesses navigate the landscape by leveraging platforms in a more cost-effective manner.
The water is too murky to see too far out beyond the next six months. We need to see how things are going to play out for the second half.
Artificial Intelligence Will Need People More Than Ever
— Mark Smith, co-founder
You cannot spend a minute on LinkedIn these days without seeing someone talking about ChatGPT, the generative AI tool that makes it easy to do everything from write content to code. It’s understandable that ChatGPT has gained so much attention. OpenAI released the tool publicly in November 2022 and made it easy for anyone to use it. The public responded. But ChatGPT is just one in a growing number of AI tools being used to do everything from manage customer queries to create royalty-free music. Right now, a number of executives are experimenting with these tools to do the heavy lifting for them – the writing, image generation, and so on. But soon, the novelty will wear off. And everyone will realize what we know already: AI cannot do your work for you. People need to be involved managing AI like any other technology. If you use Google’s myriad advertising tools as we do, you likely understand. Our experience has consistently shown that automated ads powered by AI underperform without people involved to monitor and modulate them when necessary. The same is true of generative AI. These tools are slick, but they make mistakes, and they are notoriously biased. They are nowhere near the point of being self-sufficient. In 2023, some businesses will learn the hard way that AI alone is not the answer to making smart investments in digital marketing. They’ll realize that people matter more than ever.
Google Ads Will Get Costlier
— Beth Bauch, director
2023 could prove to be challenging for businesses highly invested in Google Ads. I anticipate more automation by Google, resulting in less control for marketers.
One of the most common suggestions in the “Recommendations” tab in the Google Ads platform is to convert keywords to “broad match,” away from the more traditional “exact and phrase match.” Exact and phrase match keywords are meant to only match to searches that contain your keyword, making search queries highly relevant. Broad match keywords allow your ad to show on searches that are related to the meaning of your keyword and can include searches that do not contain the keyword terms.
While we have seen some success when testing broad match keywords with Googles automated bidding strategies, we have also seen some significant failures resulting in high spend and poor conversion rates. So, you need to proceed with caution when using broad match. One of the ways we improve the quality of search queries is by adding negative keywords to prevent our ads from showing on searches that are irrelevant.
However, whereas in the past we had access to view all search queries matching our keywords, Google now limits that visibility, only showing the top search matches. This makes it more difficult to block irrelevant traffic resulting in more spend on searches with low conversion rates.
And poor-quality traffic is very costly, especially as we have seen significant increases in the cost-per-click (CPC) of both brand and non-brand keywords in 2022 – as high as 50 percent increases for brand terms alone year over year. For some clients, we saw rising CPCs even though we were not seeing an increase in competition on brand keyword bidding when reviewing the Google Auction Insights report. This is an indication that Google has raised the base price for participating in a specific auction, regardless of competition.
As Google looks to rebound and increase its profits, I expect to see even higher advertising costs for Google Ads in 2023.
TikTok Will Extend Its Influence
— Bella Schneider, senior digital marketing manager
With the increasing popularity of TikTok, I predict that the brand will expand and improve its ads manager to be more comparable to Facebook Business Manager. Currently the platform is lacking in a few areas, and if TikTok is to compete with some of the larger social channels, then it will need to make adjustments to allow for easier advertising on the platform.
Meanwhile, thanks to TikTok, I predict the world of video will dominate the advertising space. More and more video content is starting to look and feel similar to the videos displayed on the TikTok native platform. Whether it’s dances, trends, or challenges, I predict that advertising will shift towards this style of video content.
Does Twitter Have a Future?
— Max Petrungaro, account manager
I have a difficult time seeing advertisers return to Twitter as long as Elon Musk is at the helm. When Musk bought the company, things immediately started poorly with most of Twitter’s top advertisers putting their ads on pause or stopping outright. In December 2022, the situation for Twitter deteriorated, with advertising spend being slashed by more than 70 percent. Twitter tried to combat this by offering incentives to the companies that would keep advertising, but I do not believe that this will be enough to overcome the polarization that Elon brings to the table.
With most of its revenue coming from advertising, and top spending advertisers not showing ads and/or slashing budgets, there may not be a Twitter by the time 2023 is over. As long as Elon is associated with Twitter, I believe that more advertisers will start to focus their advertisements on other popular platforms, like TikTok.
Customer Data Platforms Will Have a Big Year
— Héctor Ariza, senior manager
As the push for tighter data privacy in the digital world gains momentum, I expect 2023 to be a big year for customer data platforms (CDPs). With stricter data privacy regulations being imposed by governments around the world, and the imminent cookie-less era looming, companies and advertisers are already exploring privacy-enhancing technologies in their search of a more secure, yet accurate way of tracking user activity online.
Still, whatever the alternative to cookies and existing tracking methods may be, it will likely rely heavily on data aggregation/modeling. Thus, first-party data will become ever so more important in the digital advertising world. CDPs allow companies to manage what data is used, where it is used and how it is used more easily. These systems also help with data consistency across marketing/advertising platforms and reduce the risk of mishandling customer data.
Retail Ad Networks Will Lean into Mobile Even More
— Tim Colucci, vice president
One of the biggest stories in advertising in recent years is the rise of advertising networks managed by retailers ranging from Amazon to Macy’s to Walmart. Amazon’s own ad business has become so big that it is challenging the Google/Meta duopoly. These networks have succeeded because they tap into first-party data shared by people searching and shopping on their sites. The next phase of growth will happen when they more effectively integrate consumer shopping data from physical stores into the first-party data they use to sell targeted ads. This is why retailers that operate physical stores and ad networks will invest more into their mobile apps. With self-service mobile apps, in-store shoppers give retailers data about their interests in real time in a faster and more efficient way than they do by having their purchases shared via point-of-sale technology. Look for retailers to make it easier for consumers to search and purchase on their apps – and for advertisers to run ads via self-service such as sponsored listings. Walmart has an edge on most retailers in that regard. Given Walmart’s influence and resources, I expect the company will lean into its competitive advantage while Target tries to play catch-up.
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