Six digital marketing trends to watch in 2023
As we enter 2023, many brands are bracing themselves for a global economic slowdown. With South African GDP expected to grow at only 1.1% and inflation showing few signs of abating, most companies will be carefully scrutinising their advertising and marketing spend. But even in this climate we can expect strong growth from digital marketing because it’s an accountable and measurable medium.
On the global front, Warc forecasts that pure-play internet advertising will grow by a relatively modest 5.5% in 2023 following growth of 11.5% in 2022. But some sectors and platforms will outperform. Online audio is forecast to grow by 25.6% this year before slowing to 10.1% in 2023, while TikTok ad spend is expected to rise by an astonishing 143% in 2022, and 41.5% next year.
Here are some the trends to look out for in 2023:
Hot growth for TikTok
TikTok launched in 2017 and has rapidly grown into a formidable rival to Facebook, Instagram and YouTube. It’s the platform to watch in South Africa, especially with the company rapidly staffing up its African office. Perhaps because its targeting and optimisation tools aren’t yet as mature as the ones on offer from Google and Meta, TikTok doesn’t yet compete with the more established platforms in terms of return on investment.
Yet marketers know that it’s where more and more of their audience is, so it’s the platform to which they will allocate the highest ad spend increases next year. Meta, with Instagram Reels, and, more recently, YouTube, with YouTube Shorts, have introduced short-form video products to compete with TikTok. It remains to be seen whether their strategies will be effective in slowing TikTok down.
Influencers turn pro
The rise of platforms such as YouTube, Instagram and TikTok has given birth to a new generation of influencers and content creators. The production value of the content that some of the most popular influencers create has grown by leaps and bounds. Many of them have also turned monetising their audiences into a fine art. The influencer marketing space is expected to generate an eye-popping $22bn in revenue in 2022.
This is a far cry from the mommy blogger or Minecraft YouTuber clichés of the past — today’s top influencers run serious businesses. Knowing which ones could reach their desired markets can help a brand to grow in a cluttered media landscape. Finding and understanding value is one of the major challenges in this space, given that influencers range from those with millions of followers to ones with valuable niche audiences.
All marketing is digital marketing
Dividing marketing and advertising into “traditional” and “digital” siloes makes increasingly little sense. Most channels and touchpoints today include some digital elements. In TV, for example, the lines between streaming services and paid satellite are disappearing. You can watch streaming services like Netflix in your lounge from your decoder or smart TV. And you can watch satellite channels live on a mobile device or PC.
With streaming services like Netflix starting to use advertising to subsidise cheaper sub plans for price-conscious users, programmatic buying and measurable ad campaigns are coming to TV. In out-of-home advertising, digital screens are becoming more popular. Again, ads are sold via programmatic platforms and ads can be targeted to audiences rather than to locations.
Above-the-line media buyers should keep an eye on this rapidly evolving space.
Mastering first-party data gives a competitive edge
The data free-for-all is over. Regulators and legislators worldwide have introduced stricter data privacy regulations, and big technology companies have implemented new restrictions for how advertisers can use third-party cookies and mobile identifiers to deliver and track ads. This means it has become harder for advertisers and platforms to build effective audience lists for conversion-optimised campaigns.
Advertisers that have built rich customer databases and the capability to use this first-party data for customer insight will have an edge in this new environment. They will be able to reach customers with more relevant messaging by feeding algorithms on platforms like Facebook and Google with data from customer relationship management and other internal systems.
Machine learning and algorithms on these platforms will do a much better job of getting the right banner or social ads in front of the right audience segment if they have access to good customer data. But to succeed with this approach, brands will need to earn customers’ trust so that the customers will give permission for their data to be gathered and used.
Brands (or their agencies) will also need access to people with technical skills such as data science and integration to get the most from their first-party data.
Lost in the metaverse
Meta — and its Facebook and Instagram platforms — are among the biggest losers, as the likes of Apple restrict third-party mobile identifiers on their platforms. Revenue growth has ground to a halt. These trends, along with Meta’s sheer size and dominance, mean the company has to look elsewhere for growth. Mark Zuckerberg is betting the farm on the metaverse.
He believes the metaverse is the next step in the evolution of the internet — an immersive, three-dimensional virtual world built on technologies such as virtual reality (VR), augmented reality (AR) and the blockchain. Meta is investing billions of dollars into metaverse platforms and technologies, but doesn’t yet have much to show for it. Investors aren’t convinced — the stock price has plunged to about $117 from $338 in January.
This is a long-term strategy, given that the tech is still immature. But digital marketers shouldn’t be too quick to dismiss the potential of the metaverse. Meta is far from alone. Sony is launching the PlayStation VR2 unit next year and Apple is reportedly making substantial investments in AR/VR. Over time, we could certainly imagine a richer internet evolving from today’s somewhat clunky VR goggles and awkward software
The internet everywhere and on everything
The internet of things is a trend the tech industry has spoken about for years. But it’s one that is starting to become more tangible. Consumer adoption of devices such as smart speakers, doorbells, TVs, watches and cars is on the rise. People will interact with technology using their voices more and more; what’s more, digital tech will carry out many tasks and chores for us in the background based on our behaviour or context.
These devices will gather rich data that companies will be able to use not only to market their offerings to customers but to design and optimise their products and services. They will also create new interfaces where brands can engage with customers. There are some complex privacy issues to work out. Brands will need to think carefully about how they can use this access to improve customers’ lives without being creepy or annoying.
Grant Lapping is the digital executive at new-age systems and solutions integrator, +OneX
The big take-out: Strong digital marketing growth is expected in 2023 because it’s an accountable and measurable medium.
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