As the advertising industry continues to evolve rapidly, ad technology trends for 2023 look equally promising as in 2022. Globally, media owners ad revenue is estimated to reach $855.9 billion in 2023 which is an increase of $47.8 billion from the 2022 prediction. That’s why we’ve gathered 5 advertising technology trends you need to know for 2023 to stay up-to-date and ahead of the competition.
1. Dependence on First-Party Data
Traditionally, due to the digital transformation of the advertising sector, advertisers relied heavily on third-party cookies to target new possible customers and identify revenue streams. First-party data, however, has gained importance due to rising privacy legislation, requiring advertisers to reconsider their strategies. As a result, in order to access this data, brands, retailers, and publishers all need to establish relationships with their customers.
As Google delayed the depreciation of third-party cookies until 2024, this has allowed publishers and advertisers more time this year to explore new solutions and opportunities around gathering first-party data.
Google is also a great example of how large tech giants can use first-party data for advertising. Additionally, a lot of advertisers have elected to use “walled gardens”, an environment that allows the platform provider to have control over any of their content, media, and applications and the ability to restrict access as needed. Publishers are well-positioned to create their own walled gardens since they have verified audience data that they gather each time someone logs in to view their content.
Other industries such as retail media and streaming services also have many opportunities in gathering and utilizing first-party data. Many retailers, including Tesco, have started leveraging information from their “Clubcards” or loyalty programmes to develop communications that are highly targeted and tailored based on actual purchasing patterns. In 2023, this trend is most likely to continue as brands and agencies can utilize this data from loyalty schemes in order to create better retail experiences.
2. Power of Connected TV (CTV)
In 2023, it is expected that overall ad spending would rise, with CTV expected to take the lead with an increase of 14.4%. The streaming industry is rapidly changing with many services opting to introduce ad-supported streaming models. Netflix is planning to launch their ad-supported service which will impact a majority of users in the service. However, in an effort to make this tier more appealing, they are trying to include more content and more diversity within that content. Other services such as YouTube have already incorporated this and have seen great success.
The CTV space is going to continue to develop and with that comes many challenges and opportunities for streaming services. An opportunity for the streaming industry is that much of the CTV inventory is still purchased directly, programmatic advertising has a lot of room to grow as a result, and deliver more dynamic and customized advertisements. Another opportunity is that through the use of first-party data, CTV can offer more personalized targeting possibilities, and moreover, it provides great eCommerce potential given that consumers may conduct a product search on the same device they used to see it.
3. Video Advertising is on the Rise
Given the previously mentioned expansion and maturation in the CTV market, it’s not surprising that video will be a dominant ad medium through 2023. Social media platforms are following suit by expanding their video features and capabilities. This year, it’s projected that approximately 35% of social media ad spend will come from video ads.
Contextual video ads are viewed by the advertising industry as an alternative to third-party data marketing. Publishers and advertisers now have numerous chances to provide consumers with high-quality video content due to the growth of social commerce.
Due to their unique ability to capture viewers’ attention, video commercials offer great possibilities for advertisers. They can effectively communicate messages across all platforms and devices because they are interesting, captivating, and effective.
4. Geotargeting & OOH Advertising
Geotargeting and OOH advertising will be popular this year. In its simplest form, geotargeting is a technique for establishing a customer’s real-time geolocation, both on and offline, with the goal of delivering personalized content based on this information.
With the rising usage of geotargeting technology, companies can now gather the information that points them in the direction of the right customers, the right locations, and the ideal times to display their adverts. Advertisers can also employ programmatic geolocation signals and combine online and offline usage data in order to better connect with their audiences when they are on the road through posters and billboards.
When geotargeting technology is used in tandem with OOH advertising, it is extremely effective since it gives advertisers access to several benefits, such as improved brand recognition, more conversions, and improved campaign performance measurement making this a key trend for 2023.
5. Omnichannel Advertising
We live in a hybrid world, where the line between the physical and digital world is becoming harder to distinguish as customers tend to engage in both. In order to keep customers satisfied in 2023, advertisers and retailers must implement an omnichannel advertising strategy in order to guarantee they show up where their customers are present.
Omnichannel strategies have become crucial in order to achieve and accommodate customers’ highly customized experiences. On a broad scale by targeting previously untapped markets and demographics, this method makes it possible to efficiently deploy advertising spend across different channels and reach wider audiences. By capturing customer information once rather than at each point of contact, operational efficiencies can be achieved.
Ad technology is important, but when a consumer is online, it is difficult to target them in the offline environment. The retail industry, in particular, is combining both in order to satisfy these needs. IKEA for example utilizes augmented reality to display how their products could look in your home bringing the shopping experience offline through the application. Although online shopping continues to be a preference in modern society, offline continues to be of value. In order to improve your total customer experience, you must choose the best components from each and combine them.
The five trends outlined in this article are expected to help the advertising industry to grow throughout 2023 and we are eager to see what effects if any, they will have on this rapidly evolving industry. In particular, publishers and advertisers will need to be prepared to do more with less personal data as the advertising market is expected to undergo significant changes this year.
We learned from last year’s trends how much can happen in a year and how critical it is to be able to quickly adjust to new trends and challenges. More of the same seems to be in store for this year.