Budget Increases for 2023, the Big Screen Still Wins, and GenZ’s Attention Span

In a world full of constantly changing technology and information, this monthly newsletter keeps marketers up-to-date on the latest trends that will impact their business. I hope you enjoy it!

If you haven’t subscribed yet, click the “Subscribe” button in the upper right corner above.

---

Despite recession fears, customers spent a record?9.12 billion?online shopping this Black Friday.?Some of the biggest winners have been flexible payment options, with payments using BNPL up 78%. Mobile was the other big winner, with almost half of all sales made on smartphones which was a 44% increase over last year, and finally, in-store has also seen a lot of love, with almost two-thirds planning to shop in person this year. This tracks with the ROPO (research online purchase offline) trend we have been following. So for brands, it may be a stronger-than-expected holiday season, but the reason is that so many brands were able to offer discounts and flexibility to consumers.?

Despite the recession fears, most marketers are optimistic about next year, with most saying they will keep or increase their budgets in 2023.??41% of?advertisers?expect to maintain their 2022 budgets; everyone else is split, with 29% saying they expect a decrease in their spend and the remaining 29% saying they would see an increase. I'm more excited to see where the spending is going. Around half say they will up their spending on social media and retail media. Many also cite increased?investment?in CTV and YouTube. The rise of retail media, brand focus on creators, and increased inventory and automation around CTV, combined with the?decline?of traditional search advertising, means your media plans will look very different in 2023. This is your gentle reminder that if your plans look the same in 2022 as they do in 2023, you are missing the mark.??

As we discussed, retail media will undoubtedly be one of the major winners of 2023, with more and more companies increasing their retail media offering to provide more ad units, inventory, and automation. Amazon, who leads the pack, is no different. They are actively seeking ways to innovate and expand their ad product.??During Amazon's Unboxed event, they unveiled their latest offerings.?I won't go through all of them, but I want to touch on a few I found the most interesting.?

Rewared Sponsored Display ads.?

Allows brands to offer an Amazon credit to those who buy their products. While this is an interesting new offering, like with everything Amazon, this is just another cost advertisers would need to stomach, eating into already thin margins. In general, deals and coupons lead to better conversion rates and performance. However, a cashback offer is slightly different and may lead to differing performance, so it's worth a test.??

Sponsored Display for non-endemic brands

Non-Amazon sellers can advertise on Sponsored Display, which previously was only available to Amazon sellers. While non-Amazon sellers have been able to use the Amazon DSP, Sponsored Display is a good use case for smaller brands that can't meet some of the DSP minimums. However, this is less interesting than what it signals. A month ago, Amazon announced they would allow non-Amazon sellers to advertise on Amazon search as long as the seller uses Buy with Prime. For Amazon to grow, it will have to open up its ad platform to non-Amazon sellers, and this will be the first iteration of that.??

Sponsored Display Video Creative

To get brands to spend more money on advertising across Amazon's ecosystem, they announced a way to create video assets easily. Developing video can be cost-prohibitive for smaller sellers, meaning those sellers will opt out of using video ad units on Amazon. Giving brands a tool to create a free or very low-cost video will encourage adoption and push brands to continue to use Amazon as a full-funnel marketing platform.??

Amazon will also be rolling out its product discovery product called Inspire.?The TikTok-style product will allow consumers to explore products and ideas from content created by influencers and brands.?TikTok is a huge traffic driver for Amazon, especially during Prime Day, and they hope Inspire can replicate that discoverability. Amazon is trying to turn into a complete product discovery platform vs. a demand capture platform. They want shoppers to spend more time on the app browsing content casually, almost replicating window shopping. Right now, creators and brands can post to Inspire, so if you are a brand selling on Amazon, make sure this is part of your strategy going into 2023. First movers have a competitive advantage and stand out.??

In addition to Amazon's expansion of ad products, they are also forming new alliances to capitalize on increased interest in resale products.?Amazon partnered?with a luxury vintage apparel company, What Goes Around Comes Around. Amazon is not the only one jumping on the bandwagon; popular fast fashion company Shien is also.?Shein?launched a resale option, Shein Exchange, where you can buy and sell previously owned Shein items.?The launch is an apparent attempt to grab a chunk of the growing resale market. However, this may not be successful. First, their products are not made to last and won't hold up to repeated wearing. Second, one of the reasons that consumers (especially GenZ) are interested in the resale market is the positive environmental impact of recycling clothing. Given their focus on throwaway fashion, I wonder if anyone is buying that they are trying to do good.?

According to the?Wall Street Journal, Shein is also trying to launch an online marketplace allowing other brands to sell on their site.?Shein's already massive customer base would make it very attractive to other sellers looking to expand their customer base. Given Amazon's growth in apparel, it's easy to see why Shein would try to build this out. However, given Shien's focus on fast fashion, sellers with similar products should take notice, but this will only be a fit for some.??

Now to get back to GenZ, according to a new?study, mass marketing does not work for?Gen Z, which tends to reject mainstream pop culture and embrace niche cultures. According to the study, the majority (91%) of those aged 18 to 25 said there is no "mainstream" pop culture. Instead, Gen Z consumers embrace subcultures. Gen Z said they want personalized experiences from brands instead of mass communication. If GenZ is part of your target demographic, this is extremely important. If this generation embraces subcultures and niches, it's crucial your brand does, also. Find ways to speak to their interests and not lump them all together - Reddit and micro-influencers would be a great place to start.?

Not only does GenZ want personalized communication, but when you talk to them, you better hook them fast. According to a new?Yahoo and OMD?Worldwide, Gen Z loses active attention for ads after just 1.3 seconds—less time than any other age group. So for advertisers, personal communication is a must, and attention must be earned instantly. So for brands, what do you do? First, short ads are key, especially when reaching this demographic. Second, if you have 1 second to capture attention, you have to act quickly and not oversaturate ad platforms with the same assets repeatedly. Find ways to create ads quickly and on the fly - this is not the time for high-end and large-scale video production - that will be too hard to scale.?

Shopify, the not-so-secret Amazon competitor, now allows customers to search for items across all Shopify merchants.?The Shop app is trying to become a complete marketplace as Shopify continues to encourage the discoverability of merchants by customers as an additional value ad. A universal search will eventually mean an advertising platform for merchants who want to pay to rank higher. Expect to see Shopify become a more customer-facing brand and more of an Amazon competitor than ever before. If you are a Shopify merchant, try to get ahead of these opportunities and take advantage of Shopify's discoverability.??

Finally, A recent?study?by Spectrum Reach and Magna Global compared the impact of advertising across single versus multiple media screens. They found that a multiscreen approach increases ad attention, retention, and purchase intent for consumers.?Specifically, CTV and linear appeared most memorable for consumers. Despite the increase in purchase intent from the big screen, consumers were more likely to respond to ads if they saw them across different screens, with 41% of survey respondents claiming better recall when they saw the same spot across linear, CTV, and mobile. The other major takeaway was that the order of screens also impacted ad effectiveness. Leading with linear or CTV increased purchase intent even more than leading with mobile or web video.

---

Megan Conahan is a 17-year veteran of the digital marketing industry. Over the last 17 years, she’s consulted with fortune 1000 brands on how to best negotiate the ever-changing digital marketplace demands and create unique solutions to set them apart. Megan is an EVP at Direct Agents, an independent and minority-owned digital marketing agency.?