Navigating the Rapidly Shifting Advertising Landscape: Key 2023 Trends Every CMO Must Know

For today's CMO, no year brings more pressure to deliver transformative growth than one marked by economic volatility like 2023. But transformation cannot happen without keen awareness of the evolving advertising ecosystem shaping marketing reality.

This year brought a tsunami of disruptive developments—from generative AI to retail media defying gravity amid turbulence. For brands to stay competitive, CMOs must not only monitor these trends, but also understand how to harness them to stay ahead of the curve.

These trends reveal a few inescapable truths:

• Change is the only constant. New technologies continuously alter strategies. Economic waves force regular reinvention. And consumer behaviors shape-shift persistently.
• Speed is survival. In turbulent times, brands clinging to past playbooks sink. The boldest innovations come from scrappy risk-takers. Fortune favors the nimble.
• Data is oxygen. Consumer intelligence observed across media fuels opportunities. Benchmarking against metrics steers growth. Analytics optimization drives performance.

With these principles in mind, I want to explore the top three trends that will make or break advertising success in modern marketing. Master these, and 2024 may still bring moments of magic between the mayhem.

AI Gets Generative

Let’s start with the 800-pound gorilla that dominated early headlines—generative AI. The likes of ChatGPT and DALL-E 2 burst onto the scene displaying uncanny linguistic and visual abilities. As marketers, we instantly imagined AI writing effortless copy or designing endless creative iterations.

But does this revolutionary technology deserve the hype? Can it create brand-building ideas or only mechanical outputs? What role should it play in an ethical marketing future? Difficult questions still loom around generative AI.

What we know is that AI will assume advertising’s repetitive grunt work—endless sales emails, basic social posts, and monotonous banner ads. The question is if AI can make the intuitive leap towards high-value strategy and imaginative campaigns. Maybe - with human oversight.

But while the tech industry remains turbulent, Google, Meta and other advertising titans aim to integrate it within their platforms. Adobe already integrated generative AI into Photoshop and majority of retailer are now leveraging AI chat bots. Why pay agencies to create multiple banner ad sizes when these systems spits out hundreds of optimized options instantly?

This doomsayer scenario may still be years away, if ever. But as AI capabilities explode, CMOs must prepare for augmented creative processes and amplified personalization. Testing AI’s possibilities in limited scopes makes sense today—but require a level of transparency and ethical development. Rushing headlong into mass automation using this tools poses risks that could damage consumer trust.

For now, generative AI brings more pointed search results and definitive query responses. Which means more competition for high-value search real estate. As AI content fills slots, ad costs could climb higher. That demands smarter SEM optimization and zero-waste budgeting.

Yet, in chaos lies an opportunity for disruption. Savvy brands are now using AI as a collaborator—not just a labor replacement tool—which unlock new creative strategies and velocity.

TV Fragmentation Births CTV Supernova

Now onto the less terrifying but equally disruptive rise of connected TV. While still playing catchup to its father, linear TV, make no mistake—CTV is the fastest-growing advertising channel today. Its ascension looks unstoppable as media consumption fragments across streaming services.

This year over 40% of US adults will use a connected TV device monthly—totaling 110+ million households. And experts forecast nearly 50% CTV adoption by 2025. With viewership booming, ad dollars chase eyeballs.

Recent projections show US CTV ad spend catapulting 21% this year to $25 billion—overtaking radio, newspapers and magazines combined. By 2027? This number will nearly double reaching $46+ billion.

Yet traditional TV still earns more dollars today, given its enormity and entrenched budgets. This slow decline buys linear TV time to adapt. But with 3 million cord cutters annually, CMOs must divert dollars to streaming’s growth story.

Fueling CTV’s rise are ad-supported subscription tiers now offered by giants like Disney+, Paramount+ and Netflix. This unlocks a massive new inventory of bingeable content paired with addressable ads—catnip for advertisers. To prepare for next year, expect over $1.3 billion in new spending on such tiers this year alone.

But beyond just replicating linear TV ads on streaming, CMOs should explore content marketing integrations. Marketers should align brands with relevant programming through subtle product placements or sponsorship opportunities. Use data to microtarget cult fanbases.

And rather than concentrate CTV efforts on known streaming titans, also consider targeted advertising on niche passion apps related to gaming, sports, music and more. This “streaming beyond video” space offers engaged user mindshare.

Still, TV traditionalists take heart. Linear TV should exceed $70 billion in ads annually for years to come. But even networks now aggressively push owned streaming apps to court cord cutters migrating to on-demand. That inevitability calls for fluid CTV strategies today to avoid disconnected outcomes tomorrow.

Retail Media Defies Gravity

Finally, another trend flying higher while the economy stalls—retail media networks. Much hype surrounds retail media for good reason. Brands flock to exactly where consumers exhibit buying signals, even amid turmoil in consumer spending. And retailers guard the holy grail: an ocean of shopper behavioral data.

Recent reports show retail media advertising swelling 20% annually—to reach $141 billion globally by 2027. So why does it demonstrate such defiance of gravity?

Firstly, retail media taps directly into ecommerce, growing at 15% this year despite shaky consumer confidence. Secondly, privacy changes like IDFA and recently postponed cookie deprecation limit access to targetable user data for regular publishers. Retail media fills this vacuum.

And while Amazon commanded over 70% of retail media last year given its online scale, competitors are now on the rise. Mass merchants like Walmart, Target and Kroger have rapidly scaled their retail media networks (RMNs) to offer brands attractive new snowflake data and audiences.

As retail media momentum builds across categories, adaptors will win. Getting in early to major RMNs brings first-mover advantages before costs surge on high demand. And retail media expands beyond just on-site ads or search placements.

Fast-growth areas include streaming video integrations and off-site ads leveraging a retailer’s data. Imagine Walmart banner displays on business news sites aligned to customer purchase profiles. Additionally, in-store digital signage and shelf displays open new physical retail media avenues.

But exploring retail media introduces daunting complexity with multiple emerging platforms—each with different KPIs, ad products and measurement approaches. Retail media currently lacks uniform standards which promises headaches.

To address fragmentation, agencies and specialized intermediaries now surface to streamline retail media strategies for brands feeling overwhelmed navigating RMNs directly. But marketers willing to embrace the complexity may find lucrative advantages before competition swells further.

Steering Growth Through Nonstop Change

I hope this analysis provides perspective to navigate key advertising disruptions. Though technology will evolve, economic flux persists, and consumers change unpredictably—success hinges on awareness, adaptation and data-driven decision making.

The brands I know thriving today obsessively track trends but remain agile to respond. They carefully test transformation while pragmatically optimizing current strengths. And they balance investments in what’s new with doubling down on what still works.

Rather than brace for impact from turbulence, they seem to casually surf market waves using insights as a guiding compass. None have perfectly built boats, but they refine navigation and enjoy the ride.

There are never destinations in modern marketing—just uncharted waters to explore. But isn’t that the thrill that attracted us to this journey? Charting growth trajectories through the NEXT big waves...now that promises some real magic we can create.

Rather than dread continuous disruption from emerging advertising trends, embrace it with an informed explorer’s mindset. Let curiosity fuel bold innovation but temper it with wisdom.

And if you ever lose your way, just follow the consumer—for they always light the path forward. Their behaviors hold the insights we need to steer steady growth regardless of where technology takes us next.