What’s important to watch for in 2023? A lot. According to a recent report by Insider Intelligence, the year ahead will usher in changes in ad spending, audience, and commerce. Is your business positioned to capitalize on these trends accordingly?
2023 Digital Marketing Trends to Watch for Your Business
1. The Next Tier of Digital Advertising Is Here
Google and Meta’s dominance over digital is changing. Apple’s anti-tracking initiative has disrupted both companies’ display ad businesses, altering their basis for targeting and measurement. “With tens of billions of dollars up for grabs, the next tier of digital ad players is poised to exploit the opportunity,” according to Insider Intelligence.
What it means for you: In order to offset Apple’s anti-tracking initiative, Schaefer recommends leveraging other forms of targeting, primarily through the use of primary data, where feasible. Additionally, diversification of ad spend across channels and testing is critical to stay ahead of the curve when it comes to privacy and other ad regulations.
2. Ads Drive the Social Shopping Cart Forward
In 2023, social shopping will be driven by advertising, rather than innovation. Insider Intelligence expects half of US social network users to purchase something via social media in 2023. But commerce hasn’t been the revenue driver that social platforms hoped for—and now desperately need. To capitalize on customers’ habits, social shopping strategies will need to be centered around shoppable ad placements and other commerce ads— and less on new features like live shopping and native checkout.
What it means for you: Similar to a strategic website strategy, social channels will require an organic and paid search strategy in future. This will be important to maximize the shopper journey and conversion rate within social commerce.
3. Consumers’ Time and Attention Are Declining— Marketers Have to Evolve
Attention must be earned in an instant. Gen Z adults (ages 18 to 25) have grown up in the world of YouTube and TikTok where short-form videos are the norm. They decide instantly whether to invest their time and attention in content. They skip content—including ads— that doesn’t interest or entertain them. But attention spans are declining across all ages, studies show. The entire marketing workflow needs to be reshaped to deliver campaigns that meet the audience’s expectations.
What it means for you: The dominant ad format on Snapchat is just 3-15 seconds; on Youtube, it’s 6-15 seconds; on TikTok it’s 9-15 seconds. Cutting ad units down to 15-30 seconds is no longer enough to keep the attention (and dollars) of consumers. Marketers must meet consumers where they are in their buying journey with quick, engaging content to persuade a decision. Brands and businesses bound by inflexible approval processes or long production times will fall behind the competition.
4. Gen Z Puts Its Stamp on the Next Phase of Social Media
TikTok needs to watch its back. True, it’s still Gen Z’s favorite app. “We expect nearly 70% of Gen Z internet users to use TikTok monthly next year, up from 64% in 2022,” says Insider Intelligence. But emerging competitors like BeReal are gaining traction.
What it means for you: Gen Z is seeking smaller, and safer, environments for content sharing and engagement. They are interested in sharing with others in the same location or with the same interests. Keep an eye out for opportunities to create community among your top purchasers
5. Gen Z Breaks Into the Financial Services Mainstream
Gen Z is the new customer. In 2023, there will be more adult Gen Zers than adolescents for the first time—about half the size of the millennial population. This digitally native generation relies heavily on digital for their finances. Players in this space must act now to grab adult Gen Zers’ business, while also trying to win over younger consumers to lay the groundwork for upselling them in the future.
What it means for you: Brands in the financial space (including homebuying!) need to be building awareness with Gen Z now. Leverage digital channels at the top-of-the funnel as this generation uses a more diverse set of platforms, including TikTok, to conduct research and seek out word-of-mouth recommendations. Provide personalization and human support at the point of late consideration and conversion.
6. Privacy Controls Become “Need to Have”
Apple’s AppTrackingTransparency framework was just the beginning. Demand among consumers for control over how companies use and protect their data has triggered conversation and regulation across the globe.
What it means for you: Data transparency is key. Build trust among your customers by enabling privacy tools to safeguard their data and clearly communicating what they are. If you are collecting information about your customers, be clear about how it will be used. Give customers the opportunity to opt-in to specific content streams (and opt-out easily should they choose to do so).
7. Brands Rethink How They Earn Customer Loyalty
Supply chain challenges and economic uncertainty are affecting brand loyalty. Subscription fatigue and social and environmental concerns mean consumers are rethinking how, when, and where they spend. Traditional loyalty and subscription programs no longer cut it.
What it means for you: Lose the “one size fits most” mentality. Across industries, subscription programs are being tailored to different needs and price points. Additionally, look for opportunities to differentiate your business by expanding customer benefits through other service lines or existing partnerships.
8. Connected Devices Get Ready for Ecommerce
Smart TVs, connected homes, and connected cars have proliferated and will become easier to use and more responsive. “Together, they’ll create new contextually relevant portals for commerce and help augment the $504.95 billion in US retail mcommerce (mobile commerce) sales expected in 2023,” says Insider Intelligence.
What it means for you: Retailers and brands need to keep an eye on new commerce channels as they emerge. Some will provide a more seamless customer experience, which could take away from existing sales channels. Others may provide an incremental sales opportunity, including actionable advertising. QR codes will continue to be leveraged in traditional advertising as well as in new interactive ad formats, such as DOOH (digital out-of-home).
There is a lot to look forward to in 2023. There is also a lot of change to prepare for. Connect with our team at Schaefer to ensure that your business is prepared for the year to come.