In 2023, one thing is surely clear: the future of marketing lies in advertising technology. With a market size of over $886 billion last year, the adtech industry is continuing to evolve, bringing publishers and advertisers new ways to discover and engage audiences. Modern digital marketing is unthinkable without it; personalization, targeting, analytics, and optimization are all fundamentals for which adtech has plenty of tools to work with.
The adtech industry is a constantly changing environment; over the years, numerous trends have influenced its direction. From search advertising and basic ad banners to ad exchanges and programmatic advertising, adtech has seen it all.
To come out on top, advertisers regularly research emerging markets and audiences while developing new tools to fine-tune their campaigns, and the year 2023 has brought a number of innovations.
Here, we will discuss the most promising adtech trend predictions for 2023 and see how they can impact the world of digital marketing in the near future.
AdTech Trends in 2023
The appearance of artificial intelligence and advanced machine learning has put even more focus on acquiring as much data as possible. Necessary not only for analyzing and targeting customers but also for improving AI algorithms, the race for data has influenced almost every aspect of current adtech out there.
Apart from this, visual marketing is as strong as ever, and advertisers are capitalizing on mediums supporting it, including CTVs, smartphones, and video platforms.
Let’s see how a combination of these two factors gave rise to certain advertising technology trends and how we can make use of them.
AI Becomes Widespread
This year, over half of marketers have used AI in their campaigns. This number is not surprising; programmatic advertising platforms, the most popular media buying tools, universally use AI algorithms to deliver their content.
Artificial intelligence and machine learning can precisely target the audience, categorize users into interest groups, and expand reach by profiling new potential customers. As a consequence, AI usage has become very common in digital marketing, and it is continuing to increase in popularity.
However, it does not stop with just programmatic platforms. The development of ChatGPT and advanced neural networks has allowed advertisers to experiment with new forms of marketing. Some websites have already adopted customer service chatbots to both minimize the workload of their employees and speed up the problem-solving process for customers. Additionally, more than 40% of marketers have used AI to generate content for their campaigns, including large companies such as Nestlé.
In the future, artificial intelligence will only become more commonplace; it is already possible to delegate profiling, predictive analytics, advertisement distribution, fraud prevention, and even content generation to AI, and its scope is expanding every day. We will probably see AI technology massively impact the adtech industry in the next few years.
Programmatic Advertising Still Dominates
Programmatic media buying has been around since 2008, and now, more than half of marketers’ media budgets are going into the industry. Its global ad spend is growing at a rapid rate as well, with a 13% increase in 2022. With 30% of marketers planning to increase or maintain their spend on programmatic advertising this year, it is clear that this format will continue to dominate the industry.
What makes it a powerhouse, however, is not just the raw numbers. DOOH, mobile, and CTVs are sparking interest from advertisers this year, and programmatic advertising platforms happen to have the perfect tools to take advantage of these mediums.
Additionally, these bases provide many opportunities for omnichannel marketing, which has also gained traction in the last couple of years. Of course, the development of AI that was discussed previously is also having a strong influence, enhancing programmatic for publishers and advertisers alike.
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The Importance of First-Party Data
Data privacy has become a hot topic in the 2020s, with GDPR, CCPA, and Google all taking steps to increase client confidentiality. Their efforts to protect customers’ personal information have resulted in the decision to phase out third-party cookies.
Google Chrome has postponed the process until 2024, but Safari and Firefox are already starting to eliminate third-party cookies from their browsers. While there is still time, more cautious advertisers have already put efforts into collecting first-party information and eliminating any dependencies on third-party data.
With the removal of third-party cookies, marketers will have to look at other opportunities to extend their customer databases. What they lacked in quality and precision, third-party cookies covered in quantity; with them gone next year, it may be harder to expand the reach of the ad campaigns without negatively influencing the targeting.
There are reasons for optimism though as Google is already testing solutions like browser- and identity-based tracking, which may replace third-party data over the next few years.
It is Time For Personalization
Lately, marketers have been switching from casting a wide advertisement net to providing a personalized experience for each customer. What has helped them achieve this is the combination of programmatic ads, artificial intelligence, machine learning, and contextual advertising.
With modern platforms allowing advertisers to target customers by age, gender, geolocation, or even hobbies, they can create unique messaging for each subset of their client base to engage them even further. Personalization also greatly resonates with general audiences: 80% of customers prefer companies that provide tailored experiences, and personalized experiences are appreciated by 69%.
Personalization also plays a role in connecting brands and customers on a deeper level, building long-lasting relationships with additional chances for retargeting and repeat conversions. Personalized calls to action convert 202% better than general advertising, and the majority of customers are more likely to respond to individualized offers and recommendations. The era of faceless marketing is coming to an end, and now is the best opportunity to start building interpersonal relationships with your audience.
Advancement of CTVs
The popularity of CTV may break the record ceiling this year, with a predicted $26 billion in ad spend. There are multiple reasons why this medium is attractive to both customers and advertisers. For the former, it continues to be a better alternative than traditional TVs; in the U.S. alone there could be 101 million cord-cutters by 2024. CTV offers choice with its variety of streaming platforms, free entertainment, and even games, making it a very enticing choice for audiences.
As for advertisers, it allows them to create direct pathways to customers. Since every streaming platform and application collects data, marketers enjoy considerably more targeting opportunities than other mediums can provide. It provides opportunities to show personalized content as well.
With CTVs gathering information about the preferences and interests of their viewers, it is easier than ever to show ads that will generate a personal response from the client base.
Additionally, programmatic advertising and AI have entered the CTV inventory as well, ensuring that customers engage with hand-tailored ads. It also solves the problem of migrating from third-party data, as the CTV format does not need any to have effective reach and targeting options. Finally, it lacks the problems of ad blockers and ad-skipping, since the former and the latter do not exist for streaming apps.
Evolution of Video Advertising
Video is often considered as the king of modern digital advertising. The prevalence of TikTok, YouTube Shorts, and CTV content makes video advertising one of the most successful formats. Videos accounted for 82% of Internet traffic last year, with over 79% of customers preferring videos over text and the majority of advertisers consider video to be crucial in their campaigns.
2023 can be marked as the year of innovation in video advertising with interactive, contextual, and shoppable video ads. With social media platforms such as Twitter and Instagram focusing on developing more robust systems for video formats, we can see that publishers and advertisers will put even more focus on video content.
Mobile is on the Rise (Again)
The prevalence of video has also given rise to mobile advertising. After the pandemic, people have been on the move again; with less time being spent at home, mobile once again is gaining the attention of advertisers. But what makes it especially attractive is omnichannel marketing, with mobile serving as the cornerstone.
Weaving the unified ad experience for the customer, with mobile as the final conversion point, has proven to be a very efficient strategy. With the help of post-pandemic audience habits and programmatic advertising, the mobile format is bound to increase in popularity from now on.
Focus on Transparency And Trust
The ongoing talks about data privacy have also created interest in authentic, transparent brands with strong systems of beliefs and values. Many customers now tend to be cautious when sharing their data, and companies need to confirm that their moves for more personalized experiences are not considered intrusive or violative so as to avoid losing their audience’s trust.
It is also applicable to advertising agencies, ad networks, and platforms; with AI algorithms growing ever more complex, they need to make sure that marketers can enjoy the transparency of supply chains, monetization, and data gathering methods.
The building of trusting relationships between customers and brands is also beneficial for capturing younger audiences. For example, Generation Z puts are convinced brands should serve communities and prioritise social values rather than just make good products or services. Transparency may become the main way of engaging younger audiences in 2023, and concentrating on building trust should prove beneficial in the long run.
Race For Traffic Quality
The erasure of third-party data also marks the shift from quantity to quality, with advertisers paying additional attention to their traffic. Mainly concerned with ad fraud, brands are in search of advertising partners that can be trusted. 2023 is the ideal time to invest in anti-fraud solutions and ad-tech platforms that take these issues seriously.
The best solution here is to look for bases that not only allow you to view traffic statistics in real-time but also employ various techniques to combat malevolent actors, from firewalls and whitelists to AI-driven detection algorithms that highlight anomalies in your campaigns.
Context is Everything
Contextual advertising may replace marketing that relies on third-party data by only using the environmental information to serve ads. It is already experiencing popularity with the development of AI, which is able to analyze the context and make judgment calls, and may grow even further by 2024.
This format reaps benefits not only from being non-invasive for customers, but also by being the perfect add-on for video advertising. For example, platforms like TikTok and YouTube are already developing built-in tools for contextual advertising, giving marketers more opportunities to safely reach their intended audience.
The Future of AdTech is Bright
2023 is both a time of innovations and struggles in the advertising technology industry. With new opportunities for targeting, marketing optimization, and personalization that are supported both by AI and programmatic, publishers and advertisers have unprecedented opportunities to engage customers.
At the same time, it comes at a price: we need to be wary about the privacy of the data, ad fraud, and transparency. Navigating the ever-changing marketing landscape has become more difficult, and advertisers may experience some turbulence due to emerging data privacy regulations and limitations.
Still, now is the best moment to take advantage of digital marketing. Global advertising revenue is expected to grow, and new marketing opportunities are being discovered every day. In combination with machine learning, artificial intelligence continuously speeds up the development of programmatic advertising, allowing it to discover even more new audiences and ways to drive up ROI.
The trends discussed here are very significant; but it is up to advertisers to find their own, unique path. By staying abreast of emerging trends and leveraging the power of advertising technology, marketers can navigate this ever-evolving landscape and unlock new possibilities for success in digital marketing.