Identity is not an existential crisis

Every dollar counts - measurement will be key

Measurement and attribution have always been important, but with a downward economy predicted, every dollar will count and marketers cannot have wastage in their media execution. Marketers have been trying to reconcile traditional planning and measurement with digital for some time, but this will accelerate in 2023 as channels like connected TV (CTV) and digital audio take a larger share and the economic backdrop forces the issue.

Marketers are already frustrated by the challenges of measurement across different digital ecosystems, but with programmatic video investment on the rise, and total video representing a significant part of overall spend, this will accelerate. The conundrum will be how to plan and measure across all these channels - what's working and what's not? There are some bright solutions on the horizon to address this burning issue in 2023.

Identity becomes a performance factor, not an existential crisis

We anticipate that in 2023 more advertisers will realize that identity is a performance issue, not an existential issue. The identity landscape has been changing for some time and will continue to change when third-party cookies are eventually withdrawn. The reality is that nobody really knows what the environment will look like and how it will function when everything is said and done. But marketers will realize there is no point waiting around and the sector can’t leave its fate in the hands of behemoths who have their own vested interests. There is simply too much incremental performance to be had today, by accessing the ’other half’ of internet users who are found in cookieless environments.

The solutions already exist that enable marketers to reach cookieless audiences in a targeted and privacy compliant way. Sectors like automotive, financial services and public services are at the forefront of adopting new technologies that support first-party ID-based advertising. These industries care a lot about data privacy, data security and cost transparency, at the same time as being highly focused on performance. As such they are early movers and showing incredible results. Agencies across the board should be focused on driving uplift now and adopting the technologies that exist already, in order to achieve the best performance for their clients.

Programmatic finally takes sustainability seriously

For too long, the sector has been full of good intentions regarding carbon emissions, but it has taken too little real action. Brands, agencies, publishers and adtech companies have been evaluating industry and commercial solutions and will now need to start examining their impact along the programmatic value chain. The Corporate Sustainability Reporting Directive will apply in the EU from 2024, so the sector would be well advised to start making changes now.

This increased focus will affect not only the impacts around creative, but also the programmatic supply chain, with practices like header bidding coming under the microscope and driving a closer look at supply path optimization (SPO) not only on costs, but also on environmental and social impacts.

Marketers will begin to look for more sustainable techniques and choose partners that take a stance and can demonstrate their credentials. At Adform this is an area with significant focus already, but we are always looking to do more, and the new sustainability directive will ensure others in the industry do the same.

Big tech discovers not all publicity is good publicity

Despite growing concerns and substantial fines for opaque practice in the advertising ecosystem, buyers continue to pump money into big tech platforms. However, now that they are facing increasingly unforgiving scrutiny, it’s not inconceivable that at some point advertisers may decide that they don’t want to be associated with companies that are spending millions of dollars a year on legal fees alone, to defend their working practices.

Sustainability, and environmental, social and governance (ESG) in general, is already expected to be a major trend in 2023, and companies are increasingly taking active ethical decisions about the partners that they choose. With new channels like CTV, digital out-of-home (DOOH) and audio becoming increasingly prevalent, with retail media platforms bridging e-commerce and media like never before, and with questions abounding over business practices - perhaps 2023 is the year when big tech sees itself is truly challenged.

Conclusion

Most economic markers suggest 2023 will be a tough year, but as we have seen from downturns in the past it is the companies who innovate their way through a crisis that are better placed to thrive when the economy improves. And this is likely to create some very interesting market dynamics, as large publicly traded incumbents concentrate on keeping their investors happy, while more agile companies will try to find an edge and invest to exploit their new point of difference.

Good luck to all the innovators. It will be interesting to see who the new winners are, but one thing is for certain: the sector will come out fitter and stronger.