Three seismic shifts that will have marketers rethinking 2023
Tech companies are crumbling, social media is shuddering … what should marketers make of it all? As part of our Globalization Deep Dive, Kelp Data’s Shann Biglione explains.
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I bet you none of your marketing trends for 2021 and 2022 included dealing with a global pandemic followed by revivals of nuclear threats. And yet here we are, trying to get an insights into 2023.
Past evidence tells us that such uncertainty will lead to a focus on what’s safe and familiar, at the expense of risk and innovation. The question on many C-suites’ minds is not only how to navigate those trends, but how to not let them go to waste.
Here, we look at three market trends that will have ripple effects on marketers.
1. The sobering up of tech
2022 has been the year big tech saw its first real cracks since 2001. Nothing deadly – some might argue little more than a required correction. But the facts are here: Wall Street darlings Netflix and Snap saw their valuations drop by about 80% in a few weeks, Meta has seen a 34% decline in its overall reputation since its inception (sorry Mark, the Hawaiian honeymoon is over) and Sundar Pichay seems to be spending most of his time talking about his spoiled Googlers needing to come back down to Earth.
With over 80% of those companies’ revenues coming from ads, that kind of quake is bound to send some aftershocks in an advertising industry heavily powered by those corporations.
Sadly, this new phase will likely come at a cost to creative ambition and innovation. As with every recession, companies will look for immediate results and we are certain to see the tried and tested performance marketing take the lion’s share of the impressions.
Funky formats and executions will (again) take a backseat, while words like profitability and scalability will be on every ad tech sales executive’s mind. And while many hope Netflix could bring a breath of fresh air after years being the poster child of “how to advertise without pushing an ad,” its foray into paid media will most likely follow paths well known with CPMs, pre-rolls and mid-rolls. Just more expensive.
As a side note, this trend could also level the playing field in recruitment. Tech companies had become extremely hard to compete with, often seen as career paths towards outsized compensations and ’gentler’ working hours. Let’s be honest, they still are. But as perks are being chipped away and people are waiting to figure out if Skynet is going to fire them, the great resignation could lead to the great transfusion. One that ambitious marketing organizations might be able to capitalize on – with a little bit of introspection.
2. Partnerships leaning on the big guns
As a saving grace for those big tech companies, corporations have long embraced that you can go fast alone, but you can go farther together. In Kelp’s reputation index, stories around corporate partnerships are registering three times the impact of other forms of collaborations like M&A or corporate venture capital. And within those partnerships, large companies are showing more appetite to court Goliath than David.
Small, untested and risky bets are being deprioritized lately, at a time when startup funding is already hitting historically low levels of investments. As a sign of the times, incubators are starting to feel the chill of winter. When it comes to corporate mating, size matters.
An example of this is the defense and aerospace industry – admittedly one that has a penchant for big guns. The leading headlines are about big tech partnerships, like Northrop Grumman with AT&T or Lockheed Martin and Microsoft looking at the transformation of 5G in telecommunications. Lockheed’s CEO went on the record stating the firm’s strategy to leverage a cohort of scaled commercial partners to execute against cutting-edge technology asks from the Department of Defense, often at the expense of smaller initiatives. Basically, more about how 5G changes telecommunications than whether.
In the past few months, corporations have been obsessively reminded that resources are finite. And while small businesses are cute, many will be looking for big companies who can execute. When it comes to big marketing partnerships, we will see organizations reorient storytelling around concrete strategic objectives that move the needle. Those hoping to capitalize on upstarts’ halo effects will take a hit (looking at you, web3).
3. Social media turns into social mayday
It’s a weird time to work in social media. On the one hand, it still represents a huge portion of our time spent online, fueling our obsessive-compulsive need to feel terrible about the world and ourselves (move over, news!) On the other, it’s an increasingly tough business to be in. The new golden platform is questioned for its ties to the Chinese Communist Party (Galloway argues they should be outright banned), Instagram is working hard at alienating its users by putting on its best TikTok Halloween costume (for our own good, apparently) and Snapchat, well … quite literally snapped.
Meanwhile, content creators are burning out, with platforms demanding untenable volumes of production to keep up with their almighty algorithm; a trend accelerated by the profusion of interest graphs threatening the worth of followers. We are effectively witnessing an ecosystem moving year after year towards a pay-to-play model.
If we rewind a decade, brands wanted to become people worth following, hoping they could bypass taxing ad spends. That ended with the earned rug being pulled in favor of good old paid media. Fast forward to 2022 and the reverse trend is happening: creators who wanted to be brands are finally getting what they wished for. But the social kings will need to collect their dues and we’re likely to see platforms doubling down on revenue generating strategies, sacrificing souls to the goddess of profitability.
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It’s a bit of a wild guess, but it may only be a matter of time until creators are incentivized to dole out if they wish sustainably stay on top of people’s feeds; just like the brands they so wanted to be. If this were to happen, it might lead to interesting dynamics. One, it would make brands compete with more content in sponsored channels, something that would accelerate the ’contentification’ of advertising. Two, it would lead creators to focus aggressively on monetizing their presence further, both on and off-platform.
One money-maker could be the combination of the two: a platform-arbitraged ecosystem where brands pay for the creators’ amplification, either through co-creation (harder) or a simpler tipping/sponsoring system (less meaningful but scalable). Either way, it’s hard to imagine those platforms not embracing their ultimate purpose: squeezing as much value as possible out of the stakeholders they engage. And marketers are likely the ones picking up the tab.
As a close, what is a marketer to do in times of uncertainty? As ever, those that protect their ability to invest will have higher chances to come out on top. Creativity will remain a major competitive advantage. And remember that agility, a fond concept in times like these, is less about cutting what goes to waste in the short term and more about protecting what you believe builds real equity in the long term.
Shann Biglione is co-founder and head of product at Kelp Data, a Signal AI company. For more on what marketers and their partners need to do to succeed on a global level, check out The Drum’s Globalization Deep Dive.