4 Trends Shaping Digital Marketing in 2023

Written By: Cory LeBihan and Matt Morgan

AI Moves From Behind The Algos

Artificial Intelligence has been a staple on any big prediction list for the past 5 years, and while we’re a month into 2023, it’s already achieved critical mass and dominated news cycles and conversations. AI has long been the power behind algorithms and experiences with our everyday devices and tools, but the next hurdle we’re quickly crossing is the widespread acceptance of direct AI inputs in front-end user experiences and those direct business applications.

With Microsoft-backed OpenAI leading the charge, DALL-E and similar tools have revolutionized digital art. ChatGPT has already become the bane of teachers’ existence and has shaken confidence in long-form writing as a benchmark for our educational systems. These are just two of the more prominent examples, but AI projects of all shapes, sizes, and pricing models are moving to market to leverage the power of AI to automate everything from copywriting, on-site chatbots, creative testing and structuring, site UX, and data collection.

This has also been accompanied by all of the ethical debates and panic that dystopian sci-fi has conditioned us to expect, but when Google and some of the biggest players in the industry declare “code red” it’s time for everyone to pay close attention. Google has called in co-founders Larry Page and Sergey Brin to confront the challenge of their $150 billion stranglehold of the search landscape with AI catered to provide direct answers, and I sense they’re not feeling lucky. Tech companies have been heavily investing in AI for years, but with the emergence of solutions from new, nimble creators it’s likely we’ll see big-box solutions hit beta environments and begin to seep their way even more directly into our online experiences. Google is working to incorporate AI responses directly in SERPs through BARD, and Microsoft may be set to beat them to the punch with ChatGPT integration into search results, expected as soon as March, as they also work to move it and other OpenAI functions into their Azure cloud computing solutions. It’s fuzzy exactly what this means for monetization, but it’s clear all of this is just the beginning.?

Whether it’s new upstarts or the advancement of established tech and solutions, direct AI inputs will be a comfortable and regular constant in 2023 for the media industry and beyond.

Smart Consolidation & Weighted Business Signals

We’re much more conditioned to expect AI and automation packaged safely inside a mysterious, often magical-seeming black box steering the direction of paid media platforms. We’ve traveled well past the days of manual CPC bids, siloed ad environments, and hyper granular account structures with all platforms embracing consolidation. The last two years of direction from the platforms have been some version of “segmentation for the humans, consolidation for the machines." Ironically, the more complex version has been left to us mere humans while the simple version gets the robot treatment.?

To drive home and increase the adoption of automation, Google has rolled out Performance Max campaigns, as Dynamic Search Ads are a staple of search activity across your engine of choice. Facebook has emphasized Broad Audiences fed from creative, and when structured correctly this smart consolidation has largely produced stronger results. Machine learning can evaluate more signals and more outcomes than manual processes, there’s no shame in that.

Manual inputs and strategies are more important than ever in ensuring that algorithms are using the right signals and weighing the right outcomes appropriately. Automation is only as good as the data signals feeding it, and those are now the most important levers that today’s marketers can pull. The wider the tagging structures and the more data you’re able to feed into platforms, the greater the flexibility you’ll have to achieve different goals and optimize toward specific outcomes at optimal efficiency.

For some industries, this may be more straightforward than others. The higher complexity of a company’s offerings or monetization, the longer or more complex the sales cycle. And the more limited the ad platform’s smart strategies become, the more reliant they are on quality online and offline signals. Offline Conversion Tracking isn’t new, but as increased controls are stripped out of platforms and campaigns are streamlined (goodbye match types, lines between look-a-likes are blurred, etc.), the more important effective use of these signals becomes.

UGC & Microcreative

Few things are ingrained in our daily lives as social networks. Facebook is old enough to vote and can almost legally drink. It doesn’t feel that long since we classified Tik Tok as an emerging media but they've been around for 6 years now, have over 1 billion active monthly users, and are arguably the most embedded in pop culture. Influencer/v-logger has overtaken astronauts as today’s children’s most cited career goal.

While strictly numerically speaking, that may not be achievable, brands and agencies should be striving to empower those dreams because influencer marketing and user-generated content have become such a mainstay. We’ve become so desensitized to ads and particularly the traditional commercialized creative style, it has taken more direct and more authentic feeling creative to attract attention, create resonance and produce results.

In part, this is driven by newer placement types like reels, but on the whole, UGC allows brands to streamline into more platform-native content and the feel is a lot more genuine as production is normalized. Where advertisers can create a tight fit between creative, influencer, and audience, they’re setting themselves up to beat benchmarks, and not just across newer channels and placements. Through testing, Add3 has seen a stronger performance from UGC across more traditional channels and placements than historical creative. To the extent, brands can lean into UGC and create audience, placement, and channel level micro-creative that positive performance deviation from traditional creative should only increase.

CTV Ubiquity

Much like AI, UGC, and some of the previous trends, Connected TV isn’t new. However, the scope and adoption of CTV moving into mainstream media planning for brands of all sizes is new. Say what you will about the fractured nature of the streaming market, but cord-cutting continues to gain steam and those households are forecasted to outnumber cable TV households for the first time in 2023. I’d argue that crossover is being extremely downplayed.

Of the Top 100 rated telecasts last year, 65 of them were live sports, and for Prime Time slots it was all but one of the Top 50. Google & Amazon both have signed deals with the NFL to lock in specific rights to streaming, and I expect this trend to rapidly accelerate in the next big land grab, moving the streaming needle across all demographic age ranges.

And then there’s Netflix. The streaming leader caused shockwaves in 2022 when they announced a lower-priced ad-supported tier to their subscription offering, and while initial uptake has been slow, the company continues to place big bets on content development and we’ve yet to see the full effect of their anticipated password sharing crackdown and related security measures that should push even more users into that ad-supported model.

Even without Netflix, there’s no shortage of streaming options available for advertisers. As frustrating as the fractured landscape is for consumers, it’s equally challenging for advertisers who are evaluating so many different networks, apps, and AVODs. Luckily, omnichannel DSPs have done a lot of the legwork to consolidate this buying through programmatic PMPs or gated inventory-specific auction marketplaces. These environments allow advertisers to choose off-the-shelf or customizable inventory packages to help reach their target consumers wherever they’re consuming video media. Integration in these large-scale DSPs also allows a new level of flexibility and transparency behind video advertising that will eat broadcast budgets (no real apologies to heavy up-fronts or GRP measurement), and offer smaller brands to compete for those same users all while offering digital measurement mainstays like cross-channel measurement, retargeting, and footfall traffic attribution.

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