Welcome to a new, adventurous year of advertising and marketing. The traditional tech giants are going to continue to fight each other for dominance – while TikTok will tap into the burgeoning creator economy to challenge them all for a slice of the advertising pie. Retailers everywhere are creating ad networks, but Amazon and Walmart have already established strong leadership early on. For the most part, businesses will be spending more – more on TikTok, more on Amazon, more on Google, and probably more on Apple’s fledgling ad business. But will they spend more on Meta? Read on for our insights into the year ahead.
Retailer Media Networks Proliferate – and Meta Loses Ground
One of the big stories of 2021 was the proliferation of media businesses operated by retailers such as Amazon, Macy’s, Target, and Walmart. In 2022, we’ll see more of them. Retailers are under great pressure to squeeze more margin out of their core businesses as the industry endures uncertainty. The most well established networks – Amazon and Walmart – are thriving because they tap into the data they collect about their customers (first-party data) to sell targeted advertising on their sites. In 2022, more retailers will use first-party data to help businesses create more targeted ads off-site, too, as an antidote to Apple’s privacy controls. In addition, non-retailers with large troves of first-party data, such as TikTok, will expand the same way.
I also believe Meta’s ongoing push into immersive reality will lose momentum. Meta has made an even bigger push into immersive reality (e.g., virtual reality and augmented reality) as part of its attempt to become the builder of the metaverse. Meta also intends for immersive reality to help the company maintain a dominant hold on social media and to squeeze upstarts such as Roblox out of the market. But the horse is already out of the barn: there are just too many players such as Roblox and Snapchat developing immersive reality applications for Meta to play copycat and use its size as an an advantage. And Meta has faced so much public blowback over its size and reach that squeezing out smaller players makes Meta more of a target for anti-trust regulation. Meta will lose ground, and gaming platforms such as Roblox will ascend in power.
— Tim Colucci, vice president, digital marketing
TikTok is the world’s most visited site in the Internet in 2021, toppling Google, according to Cloudfare. TikTok will become the leader in paid social. Videos and fast-breaking cultural trends are becoming more prominent factors across all social media marketing, and TikTok has mastered both. Oh, and TikTok has another big trump card to play: the site is a magnet for Gen Z and Millennials, who together comprise about 42 percent of the U.S. population. As a recent New York Times profile noted, advertisers “are present like never before, their authentic-seeming advertisements dropped in between dances, confessionals, comedy routines and makeovers.” But TikTok is just beginning to monetize all that interest from advertisers. TikTok will follow the example set by Amazon Advertising and roll out more ad units that capitalize on the customer data the company is collecting. And look to TikTok to become a social commerce giant. If you thought 2021 was the year of TikTok, you ain’t seen nothing yet.
— Bella Schneider, digital marketing manager
The Creator Economy Gets Real
The creator economy refers to a class of businesses comprising millions of independent content creators and influencers. We are reading more about them partly because apps such as TikTok have given them more power and influence. The creator economy will become even more powerful. That’s because collaboration networks are proliferating. These networks give creators an all-in-one platform to create communities and build influence. In addition, gaming sites such as Roblox and Twitch offer creators opportunities to monetize their work with potential partnerships with brands, and crypto currency sites such as Rally.io make it possible for creators to mint their own currency. The big social networks such as Meta are responding by making themselves more attractive to creators. More businesses will tap into niche networks to partner with emerging creators who are lesser-known but possess tremendous street cred. Big-name partnerships with stars will still thrive, but the social media icons will need to make room for the new kids in town.
— Mark Smith, co-founder
Tech Titans Roar
We hear a lot about the big technology firms facing increased scrutiny from Congress and legislators around the world. But to me the more intriguing story is how the tech titans keep trying to outmuscle each other for advertising revenue, an example being Apple enacting privacy controls to hurt Facebook’s ad business. 2022 will ratchet up the fight:
- Apple will start leveraging and monetizing the data they are collecting (and not allowing others to collect) in the form of some type of advertising platform. This is the culmination of Apple’s stricter privacy controls.
- Google will remove more visibility and targeting options in the name of advances in machine learning and automation, thus protecting its core ad business by taking more control of it.
- An increasing number of platforms will emerge that use first-party data to target and track and savvy advertisers will take advantage of this and diversify their advertising spend
- Amazon will grow with even more ad units for Amazon Advertising and marketing offerings such as livestreamed commerce for businesses of all size, especially smaller ones. Google and Meta will lose market share.
Unfortunately, we can count on CPCs to rise across all platforms as they attract more businesses competing for ad inventory and keywords. It’s going to be a more expensive 2022, but also a more interesting one with more ad units proliferating.
— Kurt Anagnostopoulos, co-founder
Google Ads Become More Powerful
Given the evolution of keyword matching (now AI-powered to serve ads based on the meaning of a search query), and the simplification of the ad product offerings (as Google deprecating Expanded Text Ads next summer), we will see Google Ads become leaner but more powerful. Advertisers will be forced to rely more and more on Google’s algorithm to drive results – all this, at the expense of reduced control advertisers have over campaign settings (ad content, keyword matching, targeting choices, etc.). I believe the biggest changes will continue to happen on Google’s back end as it seeks to make the algorithm (automated bidding strategies used in ad campaigns) smarter. Thus, we will see increased focus on cookie-less conversion tracking and an expansion of first-party data collection capabilities in Google Ads (i.e., scaling up enhanced conversions).
— Héctor Ariza, digital marketing and analytics manager
Social Media Ad Dollars Get Redistributed
Lush Cosmetics recently said it is quitting Facebook, Instagram, Snapchat, and TikTok over concerns that those platforms have a negative impact on teens’ mental health. (The company will remain active on LinkedIn, Pinterest, Twitter, and YouTube.) Lush said it will happily lose $13 million in sales because of the digital detox. It remains to be seen whether Lush will reactivate the accounts it quit (Lush quit some social sites in 2019 before returning), and of course a big question is whether more businesses will take such a drastic approach. I don’t think we’ll see more businesses take the Lush approach – social media is just too important – but they will shift some of their ad dollars away from Facebook and Instagram. In the past, businesses have remained loyal to Facebook (now known as Meta) because the site is critical to their advertising and marketing strategies. But the whistleblowing activities of ex-Meta employee Frances Haugen have raised the stakes. She asserted that Meta has kept internal research secret for two years that suggests its Instagram app makes body image issues worse for teenage girls. Businesses will monitor what their customers, investors, and employees say about Meta especially in this era of purpose-driven branding. Some will shift their advertising to Snapchat and TikTok while Meta takes the heat for brand safety issues. But this shift may be temporary. Meta will probably mollify brands with some updates to its products to create more brand safety, as it is already doing with its news feed to address concerns over lack of user control over their news feeds. In addition, Meta faces the ongoing threat of regulatory oversight. More accountability will come to Meta in 2022.
— Beth Bauch, director, digital marketing
Contact True Interactive
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