Things move fast in the adtech industry. With 2022 having been an exciting year, adtech trends for 2023 look equally promising. The global programmatic advertising spend is expected to touch $557 billion in 2023, up more than 100% from five years ago.
While Google’s decision to eliminate third-party cookies may have been viewed as a dark cloud on the digital marketing horizon when it was first announced, advertisers and publishers are now increasingly more confident of finding solutions around it.
Finding the best AdSense alternatives continues to remain an ongoing trend among publishers, and it seems the future of adtech would belong to more niche, specialized ad networks.
AdTech Trends in 2023
It’s widely expected that 2023 will build on the growth and innovation in adtech witnessed in 2022, along with a steady rise in global ad spend. Below we list our nine most important adtech trend predictions for 2023.
1. Growth of First-Party Data
The rapid digital transformation of the advertising industry drove marketers to rely on third-party data collection—cookies—to inform their budgetary decisions. The rise of privacy-driven restrictions, however, is forcing the entire digital advertising industry to rethink their strategies.
Recently announced privacy regulations will impact how marketers target audiences and, in 2023, contextual targeting of audiences by adtech companies is likely to take off in popularity.
Contextual targeting relies on a web page's keywords and content when deciding when to display ads, rather than relying on user cohorts as a parameter—an increasingly attractive approach given the rise in privacy-focused regulations in recent years. Google,as a result, will begin replacing Federated Learning of Cohorts (FLoC) with a new interest-based targeting proposal called Topics, focusing on user behavior from browsers.
2. Leverage in Video Advertising Campaigns
Video's importance will become more apparent as brands start to leverage it in their advertising campaigns. Viewers are likely to retain 95% of the information they receive through video, compared to the 10% absorption rate via text, according to one report.
Last year saw the expansion of video consumption thanks to social media platforms TikTok, Instagram, and YouTube. These platforms' growing popularity among users has motivated brands to adapt their ad campaigns to the latest trends.
Meanwhile, shoppable interactive video ads have cashed in on the pandemic-accelerated rise of eCommerce over the past couple of years. But video ads were around before the pandemic and have long been considered an essential part of any marketer's toolkit.
While publishers should look for the best video ad networks, large brands who want to get ahead should invest in video ad campaigns.
The ad sector sees contextual video ads as an alternative to third-party data driven marketing. Additionally, with the rise of social commerce, publishers and advertisers have significant opportunities to provide high-quality video content to consumers.
Large brands can use video ads to raise awareness and educate consumers about their brands. To do this successfully, they need to understand how their audience consumes video to avoid putting their effort in the wrong place.
3. Transparency in Brands
While 2022 was marked by a growing awareness of online users' privacy rights, 2023 is set to be shaped by marketers' efforts to adapt to changes brought about by new privacy laws.
With publishers increasingly needing their brand values and beliefs to resonate with visitors, they will have to rethink their customer strategies.
There will likely be a renewed focus on the value exchange between publishers and consumers, with publishers having to think about marketing efforts that build trust.This in turn means instances of ad fraud, misleading leads, and other malpractices associated with digital advertising will further go down.
4. Influence of Digital Natives
The impact of the global pandemic on consumers' behavior coincides with the coming of age of Gen Z consumers.
Gen X online behavior differs completely from that of millennials and marketers are already looking to adapt their advertising strategies to improve their reach with these younger consumers.
Gen Z is the first generation to be considered digitally native and members have helped drive the emergence of influencers of all sizes across various social media platforms. Influencers are now a leading factor in how consumers relate to and consume a brand, with as much as 70% of US teens trusting influencers more than the traditional celebrities
For brands, this sense of individuality means being present on different social media platforms and developing marketing strategies that promote dialogue and inclusion.
5. Effectiveness of CTV
Data-driven connected TV (CTV) viewing is expected to continue growing, given that more than 68% of TV viewing already comes from streaming devices.
Despite CTV's rapid progress, the sector is still developing and 2023 will be a time for addressing outstanding challenges.
Besides CTV's sizeable advertising opportunities, there are other benefits:
Better Targeting Options
Due to its ability to be driven by real-time data, CTV provides better targeting opportunities that are more accurate, given that they are based upon location, household, and device level.
More Opportunities For Publishers
Considering that the majority of CTV inventory is still being bought directly, there are ample possibilities for programmatic advertising to expand and deliver more dynamic and personalized advertisements.
Effective Alternative for Third-Party Targeting
With new privacy laws just around the corner, CTV appears to be one of the solutions for many marketers. CTV presents a compelling eCommerce opportunity, given that people can search for a product on the same device where they viewed it.
6. AI and Digital Marketing Merge
Artificial intelligence (AI) found its place in digital marketing in answer to the growing challenges that both publishers and advertisers face when trying to predict future consumer patterns.
While companies have traditionally relied on various technologies and solutions to analyze data and track performance measurements, they've still struggled to keep up with the market's rapid changes.
As such, companies are likely to continue embracing AI solutions to deliver better results thanks to big data analytics. With this, companies can make better predictions and more strategic decisions. For instance, contextual advertising leverages the power of AI to deliver ads that fit better with the consumer’s behavioral patterns, eventually driving better engagement.
Considering the importance of advertising data for publishers and advertisers, there's an increased interest in leveraging AI for both parties. Advertisers are looking for the best solution that fits their audience, while publishers are looking for best ad networks that can monetize their ad space at the most attractive price and with the most relevant content.
AI and ML will also lead to more advances in programmatic advertising, allowing for even more efficient matches between publisher inventory and advertiser demand.
7. First-Party Data Strategies
Ever since Google announced its plans to eliminate third-party data, the marketers have been rushing to find alternatives that can head off an anticipated collapse in ad revenue caused by privacy-related changes.
Marketers are becoming increasingly focused on collecting personal data, with one survey last year finding that 82% of respondents rated resolving personal-level identity in real time as either fairly or very important.
This trend is only likely to continue in 2023.
First-party data gives better insight into an audience's interests and allows publishers and advertisers to better target and personalize customer experiences.
The same survey found that brands had launched a number of initiatives in 2021 to capture customer data, including an increased use of mobile apps and website eCommerce, building direct consumer relationships, increasing the use of gated content, as well as loyalty and subscription programs.
Brands have begun to recognize the importance of a personalized approach with customers and the importance of the value exchange.
8. Creative Approach to Digital Channels
Brands need to develop strategies to provide seamless and consistent messaging on digital channels.
As the online customer journey evolves, publishers and advertisers need to take different approaches that focus on authenticity. This will involve rethinking traditional advertising approaches, while weighing up the risks connected to advertising overexposure.
The head of client ops at Flashtalking by Mediaocean, Lucy Hinton, has suggested tools such as cross-platform frequency management as a means of mitigating some of the challenges connected with the explosive growth of digital media ad platforms in recent years.
9. Traditional Panel-Based Attribution
With traditional panel-based measurement quickly becoming outdated, marketers are moving toward new solutions that keep track of constantly changing customer behavior.
As they look for new solutions, they are switching from traditional panel-based measurement and moving their budgets away from linear TV to CTV.
Still, some linear TV advertisers are waiting for a better panel-based solution before switching their budget to CTV ads, owing to the associated measurement challenges. At the same time, the industry has taken its first steps toward more accurately measuring CTV ad viewing.
Final Thoughts on Ad Tech in 2023
Although no one can be certain about what's in store for the coming year, we can extrapolate from existing trends to get a reliable sense of where the industry is heading.
With 2023 set to bring significant changes to the media and marketing landscape, publishers and advertisers need to be ready to do more with less personal data.
Google's decision to delay removing third-party cookies from Chrome has given both publishers and advertisers time to dive into new opportunities connected to personal data collection.
This year will have to be one of transparency and authenticity, with companies moving to find their unique voice and connecting to relevant audiences. There will also be a more pronounced growth in mobile advertising, and an increased reliance on AI and ML to leverage business opportunities.
Last year taught us how much can happen in 12 months and the importance of being able to quickly adapt to new trends and dynamics. This year seems set to involve more of the same.
Publift helps digital publishers get the most out of the ads on their websites. Publift has helped its clients realize an average 55% uplift in ad revenue since 2015, through the use of cutting-edge programmatic advertising technology paired with impartial and ethical guidance.
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