Industry leaders offer 2023 predictions: talent turmoil, data reckoning, web3 woes

The ad industry is bracing for major disruption in the coming year. Just ask the experts. As we rapidly approach the end of the year, advertising, publishing and media leaders are crossing the t’s and dotting the i’s on their 2023 budgets and strategic goals. And they’re anticipating that 2023 will prove a landmark year for the integration of AI in marketing, retail media networks, commerce innovation and the race for talent. Here are experts’ top 10 predictions for the coming year: 1. Social media and web3 will supercharge commerce Danielle Gonzales, chief executive officer, iProspect North America: “In 2023 we will see an accelerated rise in social commerce and streamlined experience to shorten the distance between ‘brand love’ and ‘brand bought.’ We will be reminded of the important intersection of brand and demand, with clear winners and losers by consumers. Winners will demonstrate the ability to seamlessly build their brand while creating value and connecting with consumers.”April Carlisle, executive vice-president, e-commerce, Spark Foundry: “Commerce is the new digital. What used to be something you planned separately will now be planned in a fully integrated manner. From creative commerce to social commerce to e-commerce, the ability to make most content shoppable is here. 2023 will be the year of ‘verch,’ virtual merchandise sold through the metaverse beyond fashion to retailer mainstay Walmart.”2. Digital media strategies will evolveVal DiFebo, chief executive officer, Deutsch NY: “As brands will be under pressure to spend more productively and prove out their activations, there will be a greater emphasis on digital and creative ways to leverage data. Marketers will not only hold onto the tried-and-true, but smart marketers will seek out and begin testing different data and targeting solutions as they prepare for growing privacy regulations and a cookieless future in 2024.”Wesley ter Haar, co-founder, Media.Monks: “In 2023 we’ll see the rise of the next playbook for digital. Traditional digital paths to growth aren’t as easy as they used to be, the Covid e-commerce boom has slowed down, performance media is under pressure and the next wave of channels and customer behaviors isn’t necessarily at scale yet. With the economic pressures as they are, 2023 will be about finding paths to growth above and beyond traditional (big idea) and traditional digital (performance) avenues.”Tomas Gonsorcik, chief strategy officer, DDB North America: “Bold marketers will spot the media bargains in 2023 and go into overdrive, increasing their share of voice beyond their market share, fortifying their competitive advantage and building long-term brand value.”3. Retail media networks will eat up a bigger slice of the pieAlexandra Theriault, general manager, Spherical, Lotame: “Brands will reach a fork in the road in 2023 and take one of two paths. In one lane are those without first-party data and a direct relationship with consumers, like big consumer packaged goods. They’ll lean harder into retail media networks like those operated by Amazon, Walmart, Target and others, which are estimated to triple what they were in 2019 to $37.39bn in ad spend, per eMarketer. Consider these relationships golden handcuffs as they’ll rely on these networks for data. (Other verticals will follow suit, such as travel where Marriott International already broke ground.) In the opposite lane are those flush with data who will pull out of the retail media networks to erect their own fortresses, forcing consumers to go directly to their website or app to buy or subscribe. There will be increased competition in the category over the next one to three years as more retail networks emerge and more non-endemic brands get into retail media advertising. Whether handcuffs or bunkers, brands should consider the risk-to-rewards of either lane.”April Carlisle, executive vice-president, e-commerce, Spark Foundry: “As retailers like Walmart evolve their retail media network capabilities, the moves from managed service to self-service will evolve rapidly and enable performance media optimization. QSR commerce will continue to heat up with providers like DoorDash going self-service and partnering with traditional retailers (like the Albertson’s DoubleDash partnership) so shoppers’ next meal and pantry needs for tomorrow can come in one delivery.”Eliza Nevers, chief product officer, Lotame: “Amazon is the new – and improved – Google. While the latter holds its death grip firmly on the ad products side of the business, Amazon not so quietly builds up an ever-growing tech stack to cover every and all marketing needs. Talk at its Unboxed conference celebrated its clean room capabilities. As the leading retail media network, there’s ample cause to celebrate. The question remains whether these moves will put it in the crosshairs of antitrust or can it keep flying under the radar of government scrutiny – unlike its compatriots at Meta, Twitter and Google.”4. The war for talent will grow complicated as recession closes in Val DiFebo, chief executive officer, Deutsch NY: “When it comes to talent, in 2023 we’ll see a slowdown of the ‘Great Resignation’ as well as an uptick in boomerangers. This will be due to economic uncertainty in the new year, and talent will hold still or reconsider making moves. And, the grass isn’t always greener – resulting in talent boomeranging back to their companies for culture, flexibility, and rethinking how compensation fits into an overall work experience.”Mike Woosley, chief operating officer, Lotame: “Industry dynamics are seeing tectonic shifts. The pandemic created some unusual dynamics and may have delayed a reckoning, but the digital giants finally got too big and overshot the surrounding market dynamics. As a result, all of the major players with the possible exception of Amazon are already doing layoffs – we’ve seen announcements from Amazon, Meta, Twitter, Snap, Microsoft and even Disney. When it comes time to cut the digital fat, the first cut is rarely enough. We’d expect to see more layoffs next year, some from the same players that have already announced a first pass. In the surrounding recessionary environment, startup and growth capital is scarce and more expensive. Some young companies in the industry won’t be able to secure funding. So we also expect to see numerous companies close shop or seek a quick sale. How hard and how many? We probably won’t know until we see green shoots hopefully next year. One thing we can predict with relative certainty: Elon Musk will be one of the three remaining Twitter employees by the end of Q1.”Tomas Gonsorcik, chief strategy officer, DDB North America: “2023 is going to test the nerve of most marketers and show just how many believe that economic downturns are an opportunity to maintain their marketing spend and gain on the competition. I suspect a few will blink, but I believe that uncertainty creates opportunity. The winners will master how to market value with emotion.”5. Data and privacy will take center stagePeter Sedlarcik, president, data, technology, analytics and insights, Spark Foundry: “In 2023, marketers will invest more in identity-based audience solutions to establish an increasingly single view of their customers and prospects across channels. At the same time, market mix modeling will have a renaissance as other attribution solutions continue to be challenged by privacy-driven tech restrictions.”Eliza Nevers, chief product officer, Lotame: “Despite urgency doubling around the need for identity solutions, 2023 will bring little to no progress as Google continues to kick the can down the road. As long as cookies exist, marketers will use them. Even those with mandates to target on only first-party data won’t realize their identity partners are relying on cookies. With zero real use cases to prove those in-market cookieless solutions work, the most exciting development in 2023 will be far fewer companies in business. The identity landscape will continue to shrink over coming quarters from more than 100 transactable IDs to a top four or five.”Michael Luckhoo, co-founder, Cirus Foundation: “With fear pouring all over the industry, a desire to reinvent security and personal ownership is strong. [With this in mind, I predict that] the data NFT will emerge. With the fear of loss or theft of data lurking in the air, this will give way to empowering users with true ownership of their own data and the ability to house, protect and choose when or how to monetize it. [It will unlock] the ability to prove you have certain data without revealing any information about it.”Mimi Wotring, senior vice-president, publisher sales and client services, DoubleVerify: “Reputation matters and brands are thinking more about how suitability strategies align with their overall values and their desire for advertising that scales. The result of this in 2023 will center on creating more diverse content, innovation in privacy-friendly and brand-suitable targeting strategies… While contextual advertising has been part of the digital landscape for some time, its challenges with scale have held it back. Brands looking for new targeting methods in 2023 will look to utilize widely accepted contextual classification tools that allow for strategies to scale across publishers and platforms.”Tyler Kelly, president, Basis Technologies: “More brands are getting serious about collecting and consolidating first-party data. The massive cutbacks against adtech and walled garden players like Meta, Snap and Twitter are a warning sign that big and sweeping change could impact many more players in the digital advertising world, especially for those not ready with practical solutions to continue permissibly collecting and leveraging audience or customer data for targeting.”Lisa Thee, data for good sector lead, Launch Consulting: “2023 will be the year when we pay more attention to identity and data. Organizations began the digital transformation decades ago when they moved applications out of data centers – now it is about training employees to keep this data safe.”6. Web3 and the metaverse will see new opportunities – and new stumbling blocksMichael Luckhoo, co-founder, Cirus Foundation: “An obvious one is the re-invention of the crypto exchanges and how they operate and how they disclose. This year [including the crypto market crashes and downfall of FTX] didn’t help exchanges and has created a negative stigma around them. This is a prime opportunity for a re-invention and or a different way of looking at things. The relationship between wallets and platforms and exchanges will change this year and a ‘middle ground’ will be introduced protecting both parties.”Mike Woosley, chief operating officer, Lotame: “The handwriting is on the wall for the metaverse based on Meta’s last earnings report. Unfortunately, it’s sufficiently bloody to make Leno LaBianca spin in his grave. Meta ‘invested’ $9bn on this metaverse thing – and every drop of that $9bn came out of its profits. Its VR service has just 200,000 users. Advice to Meta: if you want to expand in VR, be like Microsoft and buy a gaming company for $75bn. My prediction is that Meta will drastically curtail its investment by the middle of 2023.”7. CTV – and its measurement challenges – will be magnifiedPeter Sedlarcik, president, data, technology, analytics and insights, Spark Foundry: “The challenge of siloed walled gardens will amplify as streamers pivot to ad-supported models, like Netflix and Disney are doing. And the fragmentation of the measurement landscape will accelerate as Nielsen’s dominance on the video marketplace continues to be challenged.”Mimi Wotring, senior vice-president, publisher sales and client services, DoubleVerify: “As users flock to CTV platforms, advertisers have been slower to follow due to quality measurement challenges. That begins to change in a big way in 2023 thanks to IAB’s new Advanced TV Roadmap and the Video Watermark Technology that addresses measurement challenges, fragmentation and ultimately makes these channels more attractive for brands.”Hunter Terry, vice-president of solutions consulting and CTV commercial lead, Lotame: “Netflix will surprise everyone with good advertising. It’s got the people, pipes and partners to hit it out of the park. With AB InBev onboard, what could go wrong? Measurement won’t be a stumbling block either, as TV hasn’t done a bang-up job of metrics and the open web is in disarray. Will consumers balk? Likely not. If they’ll get a break on price due to ads, that may be enough of a carrot to stay. With so much original inventory, Netflix has a real advantage and more runway in global users than newer platforms. [At the same time, it’s worth acknowledging that] amazed and confused are the prevailing sentiments around CTV. There will not be a single [measurement] solution, at least for the time being. The industry will become even more compartmentalized and disjointed, which will make measurement more difficult. We see it every week when a big streamer or OEM wants to set up its own offering accessible only via its platform. Case in point: Apple just announced it is creating its own DSP specifically to focus on its CTV offering.”Jessica Hogue, general manager, measurement and analytics, Innovid: “Yes, advertisers still care about reaching an unduplicated audience across TV platforms – staying top-of-mind among consumers, especially during times of economic uncertainty, will always be critical. But with advertising dollars becoming increasingly scrutinized, return on ad spend must be visible and proven, which makes the shift to measuring not only for reach, but also for outcomes, all the more important. In 2023, advertisers will demand insight into the actual outcomes of their campaigns: ‘Did this streaming service help me increase a real-life commercial goal? How did my linear campaign directly impact app downloads? Which platforms are working for me and which are not?’ And they are right to ask these questions. This is where a unified view of converged TV – linear plus digital – becomes critical. With the right connected platform, advertisers can better understand the effectiveness of their campaigns across multiple environments, optimize to drive outcomes – like sales, downloads and registrations – and demonstrate the returns of their investments. We’ll see a greater demand for this in the new year and savvy tech partners will be ready to support it.”8. AI will reach new heightsCharles Faria & Renan Molin, creative directors, Wieden + Kennedy São Paulo: “In recent months, we have been taking a closer look at AI tools like Dall-E 2 and ChatGPT. They open up a new dimension in the creative process. We see great potential for these tools to have an explosion of use by 2023, revolutionizing the way we create and bringing deep ethical discussions about copyright and copy versus inspiration.” Steven Panariello, managing director, BBDO NY: “AI isn’t going to replace creativity – it’s going to enhance creativity. Harnessing the power of AI will unlock dynamic new thinking and creative opportunities for agencies and brands who embrace the capability deeply and at the onset of ideation, not downstream.”Tyler Kelly, president, Basis Technologies: “We have seen efficiencies of 35% with the adoption of automation software. More and more, agencies are leaning into automation to sustain the continued compression of fees to maintain profitability. This trend will continue into 2023 as the macroeconomic landscape continues to right-size.”9. Customer experience will soarTomas Gonsorcik, chief strategy officer, DDB North America: “We will see the maturation of the CX wave into a place of focus and true value exchange with consumers. Brands should double down on their peak moments of consumer connection and look to overdeliver, again with emotion leading the way. With increasingly highly scrutinized digital transformation budgets, brands simply won’t have the luxury to be everything, everywhere, all at once.”10. Creative brand collaborations will aboundCharles Faria & Renan Molin, creative directors, Wieden + Kennedy São Paulo: “Collaborations like McDonald's and [American design line] Cactus Plant Flea Market will be increasingly present. As fashion brands evolve into the content territory and become more influential within the lifestyle world, we expect for the next year that more and more consumer goods brands get into the fashion and lifestyle territory with the help of music and lifestyle creators to join the conversation.”For more, sign up for The Drum’s daily US newsletter here.

Industry leaders offer 2023 predictions: talent turmoil, data reckoning, web3 woes

By Kendra Clark | Senior Reporter

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