Media trends in 2023 in an environment of uncertainty
After two years of pandemic, many of us were hoping to return to some semblance of normalcy in 2022, with a reduction in health measures related to COVID-19, the end of the lockdown and, as a result, fewer mandated shutdowns for businesses.
However, while we saw a clear improvement in these issues, 2022 also brought its share of surprises. It was hard to predict the arrival of the Russia-Ukraine conflict and to foresee how long it would drag on. The current geopolitical context, related to the long-term effects of the pandemic, produced major shocks on supply chains, the balance between supply and demand and, inevitably, consumers’ wallets, which are suffering through the most inflation experienced in North America in the past 40 years. For brands, analyzing and predicting the behaviour of their customers became increasingly complex due to this lingering uncertainty. What’s more, major technological and legal disruptions on the horizon for 2023 will only exacerbate this trend.
Given this unforeseeable economic context, the following question naturally arises:
What will 2023 bring for the advertising world?
While nothing is set in stone, it’s obvious we’ll continue experiencing the shocks of 2022, in addition to having to adapt to new trends brought by the technological and legal changes to come. To support your preparations for a year that seems like it will be nothing if not extraordinary, today we’d like to provide you with an overview of the main marketing trends on the horizon.
Throughout 2022, we tightened our pursestrings as increases to the prime lending rate were announced. The purchasing power of Canadians was inevitably reduced, which therefore led to a gradual economic slowdown. Now the secret is now officially out: We will experience a recession in 2023 along with a reduction in household spending and a notable slowdown in growth for many businesses. It’s therefore highly likely that many companies will reduce their marketing budgets and be even more likely than before to focus their efforts on only their most effective initiatives.
Historically, digital media was a good option in a growth-friendly economic climate. The ability to generate results in the short term while precisely measuring the return of every digital media investment allowed us to easily justify the relevance of such activities in the marketing mix. But now a number of legal and technical changes will soon overthrow this paradigm and upset our usual work methods.
A few years ago Google announced the end of cookies in the Chrome browser. We won’t even try to guess whether Google will push back the end of third-party cookies yet another year, but instead analyze what the observable effects will be on our activities based on the current situation.
Apple launched the trend with its Intelligent Tracking Prevention (ITP) in 2020 and with App Tracking Transparency (ATT) in 2021. Added to this was Google’s announcement in April of 2022 of the depreciation of its Google Advertising ID (GAID). These technological changes have a direct effect on online advertisers, who are losing more and more digital identifiers. This erosion of the available data is far from minor, since these identifiers enabled the refinement of targeted advertising techniques and message personalization as well as attribution and performance tracking.
What does the situation in Quebec look like?
If we focus more specifically on the Quebec market, the arrival of Law 25 in September 2023 will accelerate this erosion of data for advertisers.
While this piece of legislation will not have any major impact the moment it comes into effect, it’s essential for advertisers to prepare for its arrival in advance by adapting to a new legal framework that changes not just their particular methods, but their overall approach to digital marketing. For companies in Quebec, a data strategy based on collecting first-party data will be essential—one that revolves around analytics, modelling, activation and acquisition. All while respecting the legislation in effect, of course, which won’t exactly be easy.
What about the media sector?
In media, strategies will inevitably need to integrate a primary data–capture component (mainly through email) and be more tightly linked with emailing strategies. For many companies, these tactics are still operating within silos when they should be managed symbiotically to facilitate better customer experience. They should also be more deeply thought through and deployed to ensure they are not limited to acquisition only. In 2023, companies should put more emphasis on customer loyalty, since this is how they’ll be able to increase their customer lifetime value (CLV). This can be achieved by having a thorough understanding of your customers (your primary data). Be sure to prepare your data strategy if you don’t want to miss the boat!
Finally, the disappearance of audiences composed of third-party data will lead to a big comeback in the use of contextual targeting, in which a brand associates with an environment (a website) whose content has an obvious connection with its products or services. To this end, many Quebec and Canadian advertisers are setting up data clean rooms where primary data are anonymized and two entities (advertisers or publishers) can share information about their respective users. Through this partnership, advertisers can match their primary data (obtained by email) with those of a publisher in order to retarget specific customers on the publisher’s network. As a result, data clean rooms enable the creation of audience segments based on an advertiser’s primary data or even users with similar attributes
Don’t worry, linear TV won’t be disappearing in 2023!
The behaviour of consumers of video content has been evolving for many years now. On the one hand, more and more consumers are cutting the (cable) cord and turning to a 100% digital experience, while on the other hand audience data from traditional TV show that it’s still possible to reach the majority of Quebecers through this channel.
In the advertising world, it’s actually the “official” entrance of big players like Netflix and Disney+ that should generate a lot of buzz in 2023.
This was even predicted by Gartner last summer in its hype cycle, as can be seen in the visualization above. Over-the-top (OTT) TV advertising, which includes the full range of streaming services offered by Netflix, Prime Video and Disney+, is currently at the peak of inflated expectations.
I’d like to point out that I hold the same opinion, since this standing was obvious as of Netflix’s very first ad last fall. Were you one of the people who wanted to learn all about their new ad-supported option or to test it out without knowing how many subscribers it had or the different targeting options available? Clearly we need to keep an eye on how these ad options are developing, but it’s never a good idea to just jump on a train without knowing where it’s going, no matter what platform is involved.
Finally, note that given a population that never stops diversifying its sources of video content, plus the existence of ever-evolving, ever-growing advertising options, the risk of spreading yourself too thin over a multitude of platforms is becoming a real possibility. As a result, the impact of a video campaign could be reduced through marketing dilution, where your investments drown in a sea of networks in an attempt to reach an interesting slice of the population. The solution is to return to media planning basics: Performing a solid analysis of your targets’ consumption habits will enable informed choices when it comes time to decide which combination of investments will be most effective for your media mix.
As you can see, next year is all about uncertainty.
The economic context, international geopolitical climate, technological disruptions and evolving legislation will provide the framework for our practices—many changes have arrived at the doorstep of the digital marketing industry. In 2023, we’ll be facing an odd paradox as we revise certain well-established practices to step into the future while returning to the older analytics ideas we thought we had left behind.
In this climate of uncertainty, full of unforeseen events, it’s the brands that have the best understanding of their customers and that can breathe new life into their marketing activities who will emerge victorious.
N.B. Wondering why I didn’t talk about TikTok in this article? Interested in knowing what’s going on with this platform in today’s digital marketing arena? TikTok won’t just be a trend in 2023, but a necessity when it comes to creating an effective media strategy.