AI boom, social commerce surge, funnel collapse: Agency leaders share top 2024 predictions
With Q4 closing in, agency leaders are already eyeing 2024. Here are the trends they say will define the coming year.
Ad agency leaders are anticipating what's to come – from an influx of AI adoption to a rethinking of agency models / Steven Ramon
At the start of the fourth quarter, the ad industry is readying for a busy holiday season and beginning to solidify 2024 budgets.
Meanwhile, agency leaders, charged with ushering brands through the increasingly complicated marketing and media landscapes, are looking ahead to the trends that will define the coming year and help brands connect with their audiences in powerful ways.
From the buzz surrounding generative AI to a growing focus on brand over bottom-of-funnel performance tactics, here are the major trends set to disrupt the industry in the coming year, according to top agency leaders.
Nicole Souza, chief marketing officer, Saatchi & Saatchi: “Social commerce will take on an even more prominent marketing role. We've seen the rise of social commerce as a prominent player in marketing plans and mixes over the last few years and believe it will continue in 2024. Social commerce allowing for in-app conversion and posts that are shoppable have turned mindless scrolling into a shopping main event. Brands are now focused on telling stories on social platforms that conclude with a commerce moment, merging the experience with conversion and building a strong consumer brand.
Also, brands that take the time to truly understand the culture within the communities they're speaking to will thrive. It's no longer enough to reach segments based on data and market tactics. Understanding the culture that drives a particular group or segment is core to the success of any brand. No matter what the cultural tie may be – ethnicity, generational, interests, habits – fully understanding it is the only way for a brand to be embraced. And once embraced by a community, the brand's potential is unlimited.”
Kerry McKibbin, partner and president, Mischief @ No Fixed Address: “There are always cadences to things. We came out of Covid and there was a big rebounding and then a softening. And right now, I see a bit of a rebounding again, especially with the economy being what it is and interest rates potentially lowering.
Broadly, I think there will be a refocusing on creativity, because it’s the one thing that can't be commoditized.
Additionally, there was a big play a couple of years ago towards agency consolidation. I see a movement away from that, with clients realizing that they need areas of specialty from agencies. Part of that trend is also clients realizing that there are a lot of efficiencies to be had by pulling certain disciplines and areas of expertise in-house – and then relying on highly-skilled, external, trusted advisors. And I do think there's still a lot of value in the AOR, because [it creates] a deep knowledge of the brand, but perhaps that full-service … giant, global network kind of trend may not make sense for every client these days. Some, especially of a certain size or scale of spend are maybe feeling under-loved and needing more special attention from [their agency partners].
[As far as AI is concerned], every time something like this happens, it becomes the thing that everybody talks about – people love to be pundits and get up on a soapbox and talk about the metaverse, or Clubhouse, or Threads or whatever it is. AI has been around for years – it's not a new thing. To me, it's just another tool in the toolbox. The smart agencies will continue to use AI in ethical, legal ways that make sense to create efficiencies for their business as well as for clients. Just don't be on the back side of the curve.”
Dan Gardner, co-founder, Code and Theory: “AI will go from hype to reality. The investments made in the preceding 12 to 24 months will materialize, leading to a widespread adoption of AI in increasingly specialized, tailor-made applications across various sectors. This will mark the onset of significant disruptions within their respective categories. As AI's profound impact permeates through the realms of business, government, healthcare and academia, a subsequent surge in investment will become evident, leaving slow adopters at a distinct disadvantage. The momentum of AI technology will amplify as its fundamental tools become seamlessly integrated into the software and technical infrastructures that drive these industries.”
Marci Miller, US president, The Community: “My predictions for 2024 are all around being in – and part of – culture and technology. First up, these quick cultural moments that we’ve seen for years from the Oreo Super Bowl moment in 2013 to the recent Taylor Swift ‘seemingly ranch’ cycle will continue to grow and be a key part of ongoing cultural marketing for brands looking to capture the moment and the younger generations.
The innovation and technology focus in our industry has shifted around over the last few years from the metaverse to AI, and I see that continuing, along with further steps on the AI front.
And lastly, I think our industry will continue to find its rhythm in the project-based versus AOR world. For a lot of brands and agencies, there has been a heavy push into projects, which all have their benefits, but I think the industry is ready to potentially shift back towards the retainer model where partnerships can thrive in a different way.”
Marketing and advertising professionals should be keeping their eye on the evolving US consumer and invest in diversity of thought, insight and creativity. Today, the majority of the US population under 30 is non-white, and in 20 years, [this population] will be the majority of the US. The landscape in the US is evolving and there’s a new mainstream. We need to bring brands and client partners creative ideas that span the general market, including this new mainstream.”
David Lubars, chairman and chief creative officer, BBDO: “Futurists are fools, and you're a fool to listen to futurists. But I think what you can do is [tap into] what's about to happen. I was reading earlier that Madonna's true gift was seeing what's about to happen and jumping on it. And that's kind of what we do. You can't predict down the road, even in 2024. Think about last year – you couldn’t have predicted what's going on this year. So what you do is, you’re so open to whatever's new, you like thriving in chaos and fog and you're ready to jump on whatever is about to happen.
And what unites all these new things that are about to happen is you have a big idea that can be applied to it. Big ideas are timeless; what's happening and what's coming is timely. Let's take [our work with] Snickers, for example, [which includes the ‘You’re not you when you’re hungry’ campaign]. That's a 14 year-old big idea that has gone into areas and has been delivered with access by people in ways we never could have imagined when we first thought of it. The idea is so big and stretchy that it can go wherever the world needs it to. Big ideas are more important than ever. I have this metaphor that like, there are so many new technologies and new things happening that It's a pyramid of marbles. And if you don't hold it together with a big idea, it all scatters and it's a bunch of unconnected stuff all over the floor.
Jason Harris, co-founder and chief executive officer, Mekanism: “It's going to be more important moving into 2024 … to do fully-integrated work, brand building and then all the lower-funnel work like CRM and loyalty. We've added a lot of those services. Our angle is ‘soul and science’ – you’ve got to be able to do long-term brand-building and short-term business growth, and everything has to be measured.
But at some point we're going to see the need for more focus on brand, and less on just performance and digital experience, because brands are going to see that they're chasing customers and that they need that power of the brand to bring down their cost per acquisition.
Also, predictive intelligence is really important – knowing how to measure results … and, ‘How do I predict where to spend money?’ So having some type of predictive intelligence platform [is going to be critical].
2024 is going to be a pretty big rebound year. Spending is going to be up. Right now, in Q4, marketing spend is down. New business pitches are up. That indicates to me that brands are getting new resources for 2024.”
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Dani Mariano, president, Razorfish: “AI will continue to be a big topic. We're rapidly shifting from, ‘It's here and it's going to have an impact,’ to ‘How are we going to use it as a tool to drive all sorts of efficiency – whether in the way the algorithms were set up for paid search or, ‘What does it mean for creative? What does it mean for our big data? And how do we use AI as a tool to drive outcomes?’ And, frankly, ‘How do we have better connections with our consumers?’ It's a pretty exciting time for marketers figuring out how to use those tools responsibly with the right use cases, with the right measurement frameworks in place.
The other one … is that owned channels will have a moment next year – they will become forefront in the marketing mix. There are a couple things going on behind that. First, we know marketers are being pushed on their marketing budgets and being forced to prioritize ruthlessly how they spend their dollars. And in doing that, we see innovation budgets get smaller, we see more focus on direct-to-consumer and more focus on performance marketing. And in an era where you have fewer media dollars to put to work, you turn to your owned assets. And the companies that have been building up first party-data assets now have a competitive advantage, because they know who their consumers are, how to reach their homes, how to optimize their direct-to-consumer sales channels. They understand disruption of the funnel and how to make everything that's performance- and person-oriented into a brand's message. Then you layer on cookie deprecation, which is going to force marketers to use those first-party assets in a very, very different way.”
David Angelo, founder and creative chairman, David&Goliath: “Investments in AI technologies will increase. Agencies will continue to use AI to help create ads faster and more cost-efficiently. With more advanced technologies, they’ll be able to analyze even larger volumes of customer data and tailor their marketing campaigns to the needs and preferences of specific audiences, enabling brands to deliver more personalized and engaging experiences to their customers. This is all great; however, I feel that the industry needs to be careful not to be swept away by the explosion of AI. It doesn’t change a fundamental fact: the driver behind impactful advertising is and will always be creativity, which requires human talent, intuition and overall vision.
There will be a greater commitment towards brand purpose and social impact, with authenticity being a key factor. Brands that align with causes that are relevant to them, that they are passionate about – and who articulate their values through authentic action – will see a significant rise in brand advocates. This leads to another possibility I would like to see: the need to help people define their own personal purpose. Before you can authentically help a brand embrace their purpose, you have to embrace your own.
I believe there’s a post-pandemic phenomenon that still lives – one in which people continue to focus more on values that are personal to them, which gives them a greater sense of meaning and fulfillment. Subsequently, in 2024, people who are not happy in the business of advertising will leave and those who love it will double down. And lastly, there will be a return to real work with platforms that build a brand over time, not just in one-off scenarios.”
Amy Lanzi, chief executive officer, North America, Digitas: “Creativity is more important than ever. With a collapsed funnel driving moments of influence and buying opportunities at any time, ideas will remain central to fueling brand-led or creator-led ideas that capture and inspire consumers.
With the increase in ideation speed through AI, we look to see more personalization and more unexpected experiences at every touchpoint. While the 2023 AI boom has been largely focused on functionality, 2024 promises to be a year where AI becomes table stakes, and we start to see more emotive-driven AI applications that surprise consumers and reimagine what’s possible. Meta’s launch of celebrity AI influencer chatbots on Facebook and Instagram are a great example of ways we’ll look to merge creativity and joy with new technology.
Beyond AI, we’re seeing a more connected modern creative approach across web3 applications with gamification, AR and fan creators at the heart of all experiences. Gen Z consumers grew up playing games every day, which drives demand for gamification at every touchpoint, and brands who center these behaviors, attention and interactions across these platforms will lead the charge.
Further, in today's dynamic marketing landscape, the linear sales funnel has effectively collapsed, so having a brand partner who can decode the intersection of brand, performance and integrated media is essential to growth. In any given moment, a consumer can move from entertainment to purchase within one swipe. And as everything becomes shoppable – from social and influencer commerce to new channels like shoppable TV, live streaming and social commerce – a consumer's initial brand experience may be through a purchase.
At the same time, retail media networks will continue to take shape, becoming a key revenue stream for retailers. With projections indicating that retail media spending will reach $68bn by 2025, accounting for approximately 18% of all digital media spending, it's evident that this landscape will continue to expand. Retailers are increasingly adopting retail media solutions to counter declining margins resulting from the servicing of costly e-commerce shoppers, a trend expected to intensify in the coming years. One of the major growth areas in retail media is its shift from a focus solely on driving conversions to a comprehensive full-funnel approach. Additionally, the rise of advanced clean room offerings is expected to attract both endemic and non-endemic advertisers, providing programmatically targeted access to highly relevant audiences across the web – a trend that will gain further momentum in 2024.”
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