It’s the new year! Can you believe it’s 2023? This is how we feel sometimes:
At the beginning of each year, we like to write a blog featuring ad trends we anticipate for 2023. You might already be trying these this year, but these tips and statistics will be helpful for any advertiser to navigate their 2023 marketing strategy.
In a media report by Mediaocean, They surveyed marketers on the trends they’re watching for in 2023.
Many of the ones named also align with Hubspot’s 2023 Marketing Report, which highlights the trends marketers plan to leverage in their strategy this year:
- Short-form videos (TikTok, Youtube Shorts, Instagram Reels)
- Mobile-friendly website
- Brand value content creation (social responsibility)
- Social media direct messages as customer service channel
- Search Engine Optimization
- Mobile messaging (Whatsapp, SMS, Facebook Messenger etc)
- Influencer marketing
- Selling products direct on social platform (Instagram Shop)
- Virtual events (webinars, conferences etc)
Many of these overlap with the trends we’re about to identify in this blog.
Without further ado, let’s look at some important ad trends of 2023!
Global Ad Spend to Increase (Slower) & Shift Towards Programmatic
With an economic squeeze and thousands of layoffs from tech and media companies, Forbes anticipates that global ad spend will continue to increase, but slower than the previous post-pandemic years of 2021 and 2022.
Predictions say that advertisers will spend $509 billion in 2023, which is 6% more than last year’s $481 billion. 60% will be for digital advertising, which is around $307 billion.
70% of digital spending will be transacted programmatically.
Due to recent price increases and inflation, brands may allocate their budget more toward programmatic advertising than traditional media.
For example, they’re shifting to audio ads on streaming platforms like Spotify instead of radio ads. Marketers also opt for Connected TV (CTV) ads instead of television commercials.
Digital advertising offers better tracking, advanced audience targeting and more data insights at lower costs.
People Are Spending More Time on Social Apps Than Ever
App Annie’s “State of Mobile 2023” report revealed that the total time spent on social apps grew by 17% Year-Over-Year in 2022, surpassing over 2 trillion hours on Android phones alone!
The top 5 social apps downloaded in 2022 globally are:
- TikTok
- Snapchat
Note that Meta owns three of the top five popular channels.
With social media platforms taking up so much of peoples’ time and attention throughout the day means more audience reach. Advertisers should be utilizing both organic and paid social to capture engagement.
As we always mention, a cross-channel strategy is how a brand wins. Covering the grounds of where your target audience frequents is how you can serve your brand to them throughout the customer journey.
Connected TV (CTV) Advertising is Booming
According to the 2023 IAS Industry Pulse Report, almost half of media experts (44%) agree that CTV and digital video hold the most potential for innovation in the coming year.
Connected TV is a booming digital advertising channel, and advertisers are seeing endless potential.
In 2022, Netflix and Disney+ announced and launched ad-supported plans. It’s a smart strategy, not only to monetize ad space but to retain customers.
With more and more streaming services available, like Paramount+, AMC+, Peacock, Discovery+ etc., it can be overwhelming, and consumers have to choose which platforms they want to subscribe to. By offering lower-priced, ad-supported plans may allow households to subscribe to more streaming apps, and even completely cut the cord from traditional cable.
However, the concern for CTV advertising and its ever-expanding digital ad inventory is ad fraud, such as seeing a spike in traffic from bots. Ad fraud has always been a concern regarding digital ads and is often a pain point regarding programmatic advertising. That’s why finding a reputable ad publisher and ad partner, like War Room, is crucial to help you secure premium ad spaces, target the right people, and protect your brand and ad dollars.
Here is an informative article from Marketing Brew where they interviewed industry experts on what to expect from the streaming industry.
Unlike Display ads or Audio ads that only have visuals or audio, CTV ads have the best of both worlds. Similar to in-stream video ads, users are probably already watching a show or video, so it’s guaranteed that their audio is turned on. You can get creative and hook them in with great video visuals alongside music, dialogue or sound effects. You’ll be able to reinforce better brand recall.
It’s an effective way to reach audiences where you might not have been before. You could serve your ads when they’re binge-watching a show at 2 am on the weekend or after work at a gym on their tablet—there’s more reach, more flexibility and no need to compete for prime-time television ad spots for vast amounts of money anymore.
You can easily repurpose your brand’s existing video and visual assets to create CTV ads.
Concerns with Privacy on Social Media, But Advertisers Ain’t Going Anywhere
User privacy has become a more significant concern in the past few years, leading to tech giants like Google and Apple making big changes such as iOS 14 updates allowing users to opt out of data tracking and Google’s plan on retiring third-party cookies in the near future.
Here’s a video segment of an interesting perspective:
Despite algorithm changes, brand advertisers are still working on (and loving) social media platforms. Social channels have incredible reach and engagement that beats so many other advertising channels. It also is the key channel if a brand wants to target the Gen Z demographic.
In Q4 of 2022, 56% of marketers increased their ad spend on social media.
IAS reports that advertisers are increasing their budgets and diversifying the platforms they use.
When asked, “On which platforms will your organization buy advertising or monetize content?“
50% of them said they’ve been working with newer channels, like Twitch and TikTok.
Here is the breakdown comparison of their responses for 2022 and 2023:
The COVID-19 pandemic has shifted people to spend more time online and on their devices, so it’s no surprise that advertisers are trying to follow suit as well.
The ad industry will continue working with tech giants and government regulators to create an ecosystem where users’ privacy is respected and safeguarded and deliver highly relevant and targeted ads.
ChatGPT and Other AI-powered Tools Will Become More Popular
A new digital marketing trend with booming popularity is the emergence of AI-powered tools. Whether for graphic design or copy, artificial intelligence will transform and reshape the way marketers generate content.
For example, Midjourney and Dall-E are cool AI tools for creating images from user-input text prompts. They are extremely smart and intricate, but the AI-generated art has gotten the company into legal trouble. The AI art tool uses billions of internet images to train the AI without the original artists’ consent. Artists all over the world are joining forces in a class-action lawsuit. Read more about it here in Polygon’s article.
However, we think OpenAI’s ChatGPT will be a game changer.
It can generate product descriptions, social media posts, and email marketing campaigns. Additionally, brands can utilize AI-powered tools to analyze customer data and behavior, which can help inform marketing strategy and targeting. Using local ChatGPT and AI in marketing can help increase efficiency, improve personalization, and drive better results. (Those are ChatGDT’s own words!)
It will help marketers develop more copy variations, save time on content generation, and much more. We’ve been playing around with it, and it’s been an excellent tool for generating content and brainstorming ideas.
Take a look at how Ryan Reynolds’ company, Mint Mobile, created an ad from a video script created by ChatGPT. Pretty neat, huh?
Social is How You’ll Be Reaching the Gen Z Demographic
Gen Z is those born between the late 1990s to early 2010s, most aged between 11-26 this year.
Gen Z is reshaping the digital landscape through major influence on their household’s purchasing decisions.
They use search engines (Google, Microsoft Bing) and social media to research products. PEW conducted a study in 2022 on teenagers and their usage of social media apps. A significant finding was that usage of Facebook had dropped significantly since 2014-2015.
The top channels with the highest usage amongst Gen Z are:
- Youtube
- TikTok
- Snapchat
- Twitch
- Tumblr
If you want to reach this demographic, social media will be the priority channels to tackle.
Or, download our Advertising Funnel resource to see the breakdown of stages and the most optimal channels to utilize.
Meta Updating Its Targeting Options for Teenagers
In January of 2023, Meta announced that they would adjust their ad targeting options for teenagers and kids on Facebook and Instagram.
This is because “teens aren’t necessarily as equipped as adults to make decisions about how their online data is used for advertising”.
They will remove the ability to advertise to kids based on gender. But thankfully, advertisers will still be able to target based on age and location.
With an ad partner like War Room, we keep an eye out for these guideline changes and keep you in the loop. We’ll help you strategize and adjust preemptively to ensure your ad dollars are put to the best use possible.
Knowing Gen Z’s Youtube Viewing Habits Will Win Them Over
If Gen Z is your target audience, you’ll want your ads to reach them when they’re consuming content at any time during the day.
Studies show that Gen Zers are trying to cope with the stress of life:
- 83% of them use Youtube to watch soothing content to help with relaxation.
- 90% say they’ve watched a video that helped them feel like they were in a different place.
Videos like ASMR, soothing videos of faraway destinations, animal live streams, and immersive nature films that last hours are played for long periods of time.
Other relaxing content includes videos of creators doing mundane things like cleaning, cooking, creating art, etc., which is put on in the background to feel safe and secure.
Take this slime video for example, it was posted in the summer of 2022 and has 28 million views! (And yes, it’s surprising soothing and fascinating to watch.)
- 69% of Gen Z say they often return to creators or content that feels comforting to them
- 82% have used Youtube to watch content to feel nostalgic
It’s like putting on The Office episodes for the 14th time when you’re feeling under the weather!
This might hint at what types of video content to create (for example, soothing, long-form) and how to better connect with the Gen Z audience on a deeper level.
Short Form Video is King – TikTok Reigns Supreme
As highlighted in Hubspot’s 2023 Marketing Trend Report, short-form video is the strategy most marketers reported planning to use this year. TikTok is what propelled this format of content to the forefront of users. It’s not just a trendy app used by Gen Z.
The report found that kids and teens spend more time on TikTok than on Youtube.
They spend a whopping 90+ minutes a day on average.
In Hubspot’s report, it’s one of the top platforms for generating ROI (the other top contenders are Facebook, Youtube and Instagram.
26% of marketers plan to use TikTok for the first time this year, and 16% plan on investing more in the app.
TikTok has been encountering issues with US Regulations, but Digiday’s article dissects why this social channel still enthralls marketers.
Here is Hubspot Academy’s quick guide to types of TikTok ads:
Also, a beginner’s guide to creating TikTok videos:
It’s an excellent, visual platform for B2C brands to reach consumers in the most engaging way!
Instagram Will Continue Curating Trends
Instagram hit a new milestone in 2022: reaching 2 billion monthly active users. The user base is engaged in creating and consuming content on the platform.
However, the app also introduced multiple features that have been changing the user experience in 2022. The main reason is, as mentioned in the previous point: TikTok is the breakout social media star, thanks to the pandemic.
Instagram started with only static square images. To catch up with TikTok’s trendy short form, a vertical video format that people love, Instagram also introduced it. You might even say Instagram is now prioritizing short-form videos on newsfeeds.
Social Media Today even had a saucy take, saying, “Instagram was seemingly losing its own identity” as it tries to compete with TikTok.
In the beginning of January, Instagram’s chief, Mosseri shared their 2023 visions and goals for the app:
- More social engagement. People are discussing specific posts (both personal and business accounts) in their Instagram stories and DMs, and this trend is anticipated to grow even more. However, sharing thoughts on social accounts can be risky and sometimes you want to do it privately and safely. That’s why there’s a growing need for private chat groups. Instagram has started to facilitate this with its “Notes” feature, where you can share a conversation bubble prompt on your Direct Inbox profile. It acts like Stories. The goal is to encourage more conversations within the app, which will help IG with more user engagement than just the typical passive consumption of content.
- They aim to inspire creativity. With filters and overlays already available, they plan to add more customization options with editing tools. This will probably be for AR, creating 3D experiences etc. Unlike Facebook, their sister product, Instagram is a lot more visual and will help propel Meta towards the Metaverse.
- Users can discover new things. TikTok’s news feed allows users to discover new content on various topics, which isn’t built around your social circle. TikTok’s algorithm curates content you’d be interested in and helps broaden your content consumption circle. Instagram strives to do the same. Zuckerberg shared that 15% of Instagram feeds are delivered by Meta’s AI recommendation engine. He expects this number to be doubled by the end of 2023.
Soon after we drafted the content for this section, Mosseri came out with another update, saying Instagram will put an emphasis back on photos this year in 2023. So, Instagram purists rejoice!
“I think we were overfocused on video in 2022 and pushed ranking too far, and basically showed too many videos and not enough photos. We’ve since balanced, so things like how often someone likes photos versus videos, and how often someone comments on photos versus videos, are roughly equal, which is a good sign that things are balanced.
People’s creative content makes social media tick, so we’re all for this!
This is the Year to Consider Advertising in Video Games
The global gaming community consists of around 3 billion people. That means over a third of the world’s population are gamers!
Even Netflix has ventured into games on its platform:
Gaming is becoming more mainstream and relevant across all age groups. We’ve been saying this since 2020, but marketers should not overlook the potential of gamers!
Thankfully, according to the 2023 IAS industry report, 34% of marketers say there is potential in the channel, and 1 out of 5 publishers will prioritize video game advertising this year!
Business of Apps highlighted some important stats about in-game mobile apps:
- 11 out of 14 apps that surpass $2 billion in consumer spending in the App Store will be games.
- In 2023, mobile ad spend will reach $362 billion, but Year Over Year growth will slow down due to the recession.
Mobile gaming is a lucrative channel for app developers as well as advertisers. However, users don’t enjoy being interrupted by ads while gaming. That’s why advertisers should focus on creating immersive ad experiences within the games. Something that makes sense contextually and is unobtrusive.
If you’re looking to create in-game ads, you’ll win your audiences’ hearts if your in-game ads are creative, immersive and engaging.
Audio is the Emerging Content Format
Did you know that 82% of users spend more than 7 hours a week listening to podcasts? 22% of them listen to over 22 hours of podcasts each week!
Audio experiences are becoming increasingly popular as people can enjoy them in various settings, such as driving, working out, at work, or at home. The ease of listening to audio content surpasses the need for more attentive video consumption. Screen time is limited when people are on the go, but audio can be consumed much more conveniently.
Many A-listers have been shifting their content to audio, like Meghan Markle (Duchess of Sussex), Kim Kardashian, Conan O’Brien, Will Arnett, Jordan Peele etc.
Also, singer Shawn Mendes and NBA star LeBron James have guided hundreds and thousands of people through meditation in the Calm app.
70% of respondents to the IAS survey said audio listeners will continue migrating to digital formats.
Audio is where people spend more time.
Many marketers are shifting their ad efforts from targeting their consumers’ eyes to ears.
It was estimated that there were close to 424 million global podcast listeners. Take Youtube, for example, it has 2.1 billion active viewers, so audio still has a lot of space to grow.
There were a few stand-out stats in a 2022 survey by Voices, a leader in audio ads:
- 50% of users said they will be focusing on audio ads
- 75% of mobile gamers prefer audio ads over video ads
- 44% of marketers ventured into social audio in 2022, and that number is expected to reach 50% in 2023
- 81% of users have taken action (research online, connect with the brand on social, discuss the brand with others) after hearing an audio ad during a podcast
More than a third of podcast listeners listen to more than ten podcasts a month. If you look up podcasts, you’ll find countless channels that cover every interest, topic and niche you can think of. This means audio streaming platforms offer granular targeting options. Knowing what your customer base listens to is a great place to start.
If you want to start your brand’s podcast this year, you can hit two birds with one stone by filming your podcast recording session. Take “Conan O’Brien Needs A Friend“ for example; the video recording interview is on Youtube, but available as a podcast on Spotify and other audio streaming sites.
Read our audio advertising blog to learn about what platforms offer, what type of ad formats are available and more. Or, reach out to us directly to learn how we can help you with audio ads for your digital strategy!
eCommerce is Getting Competitive: Try More Channels to Stay Competitive
If you’re in the eCommerce business, you know that programmatic is how to run your digital strategy.
Walmart and Macy’s have built their own ad platforms modeled after Amazon. They’re paving a new channel for monetization by having their own ad platform. Walmart made $2.1 billion in 2021 on their platform alone, which is why we can see Uber following suit in creating their own ad platform.
If someone is trying to shop for a specific product on Walmart’s site, it makes sense to list your products there too.
Aside from advertising on shopping platforms, social media channels are also quintessential to any healthy eCommerce business’ organic and paid strategies.
Channels like Pinterest, Instagram, and TikTok have proven to be effective channels for increasing brand awareness for eCommerce brands for a few reasons:
- Large audiences: These platforms have large user bases, which can provide eCommerce brands with access to a wide range of potential customers.
Visual appeal: These platforms are heavily focused on visual content, making them ideal for eCommerce brands that rely on product photography and videos to showcase their products. - Engagement: These platforms are designed to encourage user engagement, which can help eCommerce brands build relationships with their customers and generate word-of-mouth referrals.
- Targeting options: These platforms offer various targeting options, allowing eCommerce brands to reach specific audiences based on demographics, interests, and behaviors.
- Cost-effective: Advertising on social media can be more cost-effective than traditional forms of advertising and can also help eCommerce brands track their ROI more easily.
- Influencer marketing: Many social media platforms have a huge number of influencers which can be leveraged to promote their products to a broader audience.
Connect with us at War Room to drive more brand awareness and sales in 2023. We’ll custom-build a paid campaign strategy for you to hit your goals this year!
Mobile Optimization is Critical to Every Brand
It’s predicted that by 2027, $132 billion in ad spend will be generated through mobile! On top of that, 48% of users believe that companies without mobile-friendly websites “do not care.”
That’s why there was the introduction of Accelerated Mobile Pages (AMPs). It would be best if you got on the AMP train ASAP.
2 out of 3 clicks on Google Ads are via mobile, so it’s crucial to deliver a seamless ad experience across all devices! That means your landing pages should also be mobile-friendly.
So in 2023, put yourself in your audiences’ shoes and work on improving the general user experience on your website.
Many website builders, such as Divi, Elementor, etc., have features that make building mobile-friendly pages much more accessible.
Google Will Continue to Dominate Search Ads
Google owns 92.5% of the search engine market share. That’s why PPC ads are essential to invest in.
The first three PPC ads get 41% of the clicks on a Search Engine Results Page (SERP).
Because the ads in the SERP are highly relevant, Google ads are seen as trustworthy and helpful. That’s why 4 times as many users are likely to click on a paid search ad on Google compared to other search engines!
With all the new ad types Google has introduced lately that we mentioned earlier in this guide, like Shopping Ad extensions, and Things to Do travel ads…there are more options to help your brand stand out from the crowd. A joint strategy like Google Search and Google Shopping ads will expand your real estate on the search results page.
You Should Make the Switch to Enhanced Conversions
Google Ads recommends advertisers employ Enhanced Conversions for all ad accounts. Facebook has been utilizing this technology for a while now with their Advanced Matching feature. Google promises to bridge the gap between privacy concerns with improved conversion data.
It enables Google Ads to insert customer data from a conversion action, then match that data back to ads viewed through other devices.
Here are some benefits of Enhanced Conversions:
- It gives you more robust conversion tracking
- Even more improved and accurate ROI reporting of sales on Google Ads
- Smart Bidding function helps with optimizing campaigns even better
- Better Attribution Conversions
- Recovery of conversion that otherwise might not have been measured
- Privacy safe with hashing of customer First-Party Data
This will need to be done through Google Tag Manager (GTM). Each account will require the following actions:
- Implementation of custom variables using data layer or CSS selectors
- Troubleshooting
- Enabling on Google Ads
Enhanced Conversions will be the best practice for Google Ads going forward, so make sure you set it up properly for 2023!
We offer this as an add-on service to our clients; please connect with us to learn more.
Invest in a Holistic Video Strategy on Youtube
According to Google, over 40% of people say they bought a brand due to seeing it on Youtube. Video ads have always been great for driving awareness, but with the variety of Youtube ad types available, creating ad content for every stage of the customer journey might yield better results.
People love consuming video content on Youtube, and that’s not changing anytime soon.
Aside from video ads covering awareness, consideration, and conversion stages, if your team has the capacity, consider also creating videos on your channel for people to explore more about your brand.
If you sell products or experiences, consider reaching out to influencers or vloggers that your target audience enjoys and negotiate a sponsored video. They could talk about their experience with your brand on their channel. If someone sees your video ad on Youtube, it might pique their interest and prompt them to look up videos about your brand and voila–they might just come across the influencer content!
We’ve also been seeing brands using customer review videos as their ad on social channels afterward, too!
Google shared a case study on Adidas’ video ad sequence approach.
They wanted to introduce a new soccer shoe and developed a campaign with multiple ad formats to reach audiences at different touchpoints depending on their level of engagement.
The result? They saw a double-digit left in brand awareness and ad recall. There was also a 317% lift in product interest, and the average View-Through Rate grew 20%.
Online video ad content can contribute to your brand and performance goals. We recommend you try out a holistic video strategy.
In conclusion, 2023 is shaping up to be an exciting year for advertising with new trends and emerging technologies!
From the emergence of AI tools to the increasing importance of data privacy, understanding these trends and how to incorporate them into your advertising campaigns will be key to success in the coming year.
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