A Look Back
The ad tech industry is an ever-changing, increasingly-competitive, fragmented space, full of acronyms, complex tools, ad networks, and lots of data. With the ever-changing nature of the industry, it’s important to remain one step ahead.
2022 brought a lot of growth to the ad tech space, showing no signs of slowing down heading into the new year. The ongoing digitization trend and the rise in spending to improve workflow and productivity of employees is expected to fuel the market growth in the coming years.
The increasing investments into the flourishing advertising industry are further expected to influence the market demand.1 While 2023 will bring even more growth, advertisers will be looking for more capabilities around measurement and optimization and ROI generation.
Ad Spend Forecast
Looking back at the industry this past year, advertising revenue grew by 6.5%.2 Despite the economic downturn, large ad spend declines were limited to certain markets and are not reflective of the overall industry’s health. It seems that through 2022, large advertisers are still growing revenue, unemployment remains low, new business opportunities remain steady and digital media is still growing.
As we head into 2023, a notable trend emerging is the forecasted growth of connected TV—which should see double-digit increases next year and account for one-third of total TV spend by 2027,2 as it continues to steal dollars previously allocated to linear investments. TV advertising as a whole will grow by 1 to 3%2 over the next five years, reflecting how much certain traditional investments pull down the category as a whole.
With ad spend predicted to have positive growth, it’s vital to make sure your ad dollars are being allocated correctly. Working with an experienced media partner to optimize and measure ad performance in real time should be an investment brands are willing to make going into 2023.
What should advertisers and agencies expect in 2023? Here are some predictions from the Digital Remedy Team:
A Look Ahead
1. There Will Be More Focus on Data-Driven Strategies
As streaming continues to grow in popularity, so too has “subscription fatigue,” the sense of being overwhelmed by the amount of content available. Audience media consumption will continue to shift, which will not only be a challenge in the CTV space next year as consumers rotate through streaming services but also across all media platforms. Due to this shift, brands need to be agile with their strategies, which should be powered by data such as audience insights and campaign performance.
Data is at the heart of the business, and advertisers and agencies that are not leveraging it will be at a disadvantage. OTT platforms have access to owned audience data on what is being watched within their networks, as well as when and how they’re watching. And while there’s a lot of room for more detailed audience insights, the data they have now can allow streaming platforms to utilize data-powered content strategies that are more likely to resonate well with audiences.3
2. CTV will be the Fastest-Growing Performance Channel
The rise of ad-supported streaming on CTV is an opportunity to deliver real, measurable outcomes and will continue to become a focus for marketers in 2023. Streaming giants such as Netflix have announced ad-supported subscription tiers with favorable pricing in exchange for advertising within content. This year, ad-supported streaming will generate $19.1b and by 2024,2 marketers will spend $29.5b on CTV advertising. With all of the new inventory, the streaming space is becoming increasingly competitive. Advertisers have more ways to reach consumers than ever before, leveraging targeting and performance reporting is key to ensuring ad dollars are being utilized.
While brand awareness is critical, many marketers focus on driving (and measuring) bottom-funnel actions, such as website visits, in-store visits, and purchases. Improvements in measurement for upper-funnel media are coming fast and furious. These improvements are showing that lower-funnel media can have branding impacts, and upper-funnel media can have performance impacts that will be highlighted heading into 2023.
For more on Performance TV, check out our report.
3. Cross-Channel Campaigns Will Be Essential
CTV has been increasing in popularity with advertisers, but with the economic downturn, advertisers will focus on channel diversification in 2023 and follow their target audiences more closely wherever they’re watching. Consumers today are using many different screens and devices for streaming media, and advertisers need to make sure they are keeping this in mind. Running cross-channel campaigns can create touch points throughout the customer journey that will keep their brand top of mind.
A successful performance CTV strategy has a lot of moving parts. Utilizing real-time measurement to drive decisions and focus media budgets on the highest-performing channels will be a key CTV strategy to pull into 2023. To be effective, marketers must meet audience expectations for personalization, which means taking a dynamic and agile approach with targeting and execution.
4. Contextual Will Continue to Appeal to Privacy-Focused Advertisers
Contextual targeting, which enables marketers to target users online based on contextual signals rather than third-party data, offers far more privacy for individual web users, and this is critical as we move towards a world without cookies. This means targeting the right user at the right time on the right channel with a personalized contextual message—without third-party data tracking.
First-party data infrastructure will be crucial for effective brand advertising. We see this marketing trend continuing, helping advertisers provide targeted experiences to key consumers through audience segmentation and smart audience management with the help of technologies.4
For more on the privacy-focused future of advertising, check out our talk.
5. Advertisers Can Take Control with Self-Service Platforms
With the goal of optimizing ad spending for ROI, marketers want to save time and money to ensure efficiency. That being said, many differing situations require varying needs when it comes to advertising platforms. Self-service platforms enable advertisers full control, where transparency is right at the tip of their fingers. When advertisers have the freedom to book their own campaigns, not only do they get an intimate, full-control experience, they also have the “natural” space to trial different aspects and elements within their campaign process. This includes budget, targeting, and creative adjustments.
For more on our self-service OTT platform, speak to a member of our team.
How Digital Remedy Can Help
Backed by over 20 years of experience in the ad space, Digital Remedy is a leading digital media partner for advertisers looking to maximize their advertising efforts. We provide unique targeting tactics to extend reach beyond linear, connecting with the right audience, in the right mindset, as well as granular attribution and reporting to understand the true impact of every variable within your campaign.
Digital Remedy offers performance-focused solutions, where brands gain access to a sophisticated reporting dashboard to monitor their campaigns on multiple channels, and real-time insights to optimize towards the KPIs that matter most. In addition to optimization, and granular, transparent bottom-funnel reporting, Digital Remedy provides a new standard in tracking, transparency, and results that will maximize your marketing efforts and optimize your 2023 ad budget.
Ready to turn these trends into actionable concepts for your 2023 media plan? Speak to a member of our team.