Is this the reboot the marketing industry needs? 3 opportunities for media growth
Surveying media's expansive opportunity for growth, PMG's Mary O’Brien shares an optimistic view: the recession calls for a marketing reboot.
Recession, or endless opportunity waiting to be seized? / Scott van Hoy via Unsplash
Emarketer recently downgraded its US digital ad spend forecast by $5bn for 2023 as a result of anticipated macroeconomic headwinds, such as rising inflation, geopolitical instability, recession, and supply chain disruptions negatively impacting planned marketing budgets.
The macro-environment in 2023 will put pressure on marketers to respond to the changing economic climate. As a result, many advertisers will tighten marketing budgets in preparation for an economic slowdown. Many brands will reduce budgets and lower forecasts, with some pulling back (to their detriment) on upper-funnel awareness and testing spending.
Savvy brands, however, will take lessons from history by spending into the recession and gaining a competitive cost advantage while simultaneously fueling long-term brand growth. Marketers who don’t pull back on spending will be able to take advantage of specific media opportunity areas. These include cookieless solutions and growth channels like connected TV and advertising-based video on demand.
1. Cookieless solutions & future-proofing
Marketers will have a unique opportunity to test into cookieless solutions ahead of cookie deprecation on Google Chrome in the second half of 2024 — assuming the deadline isn’t delayed further.
At PMG, we're already seeing doubling cost efficiencies of cookieless impressions (versus cookie-targeted impressions), meaning the efficiency potential for brands that lean into future-proofing tactics and testing could see massive upside. This will also help brands to position themselves well for Google Chrome’s planned cookie deprecation.
The time is now, while costs are low and cookie tracking is still enabled on Google Chrome, to test and learn what solutions drive business results ahead of the uncertain future of identification tracking.
2. Growth channels: retail media & connected TV (CTV)
While overall digital ad spend forecasts have been downgraded, not all media formats will be impacted in the same way. Growing media channels such as CTV and retail media networks offer massive innovation opportunities for marketers at lower costs than can be expected in the long term.
In addition to cost efficiencies, the intersection of connected TV and retail media networks enables CTV to be held accountable to sales metrics through partners such as Amazon and Walmart for the first time, allowing real-time optimization and budget allocation across CTV. This increased accountability of connected TV towards sales goals comes at an opportune time in the current macroeconomic climate and the increased need for all media investment to drive business results.
3. The unique opportunity for advertising-based video-on-demand (AVOD)
AVOD is uniquely positioned in 2023 as the appeal for ad-supported content increases in parallel with consumers’ desire to cut costs amid inflation and subscription fatigue.
Deloitte predicts that by the end of 2023, all major subscription video-on-demand (SVOD) services will have launched an ad-supported tier to complement ad-free options, following the launches of Netflix Basic with Ads and Disney+ with Ads in late 2022. AVOD revenues are expected to be three times higher than video subscription revenues by 2027, further demonstrating a massive shift in the video landscape. This move towards AVOD offers a competitive advantage to marketers who invest to reach consumers in premium content that was previously not ad-supported.
Marketers who stay agile with their approach and continue to invest in full-funnel marketing will see short-term cost efficiencies through decreased competition while simultaneously fueling long-term brand growth. Investing in cookieless solutions, retail media networks, and video presents unlimited opportunities for marketers to drive a competitive brand edge in 2023 and beyond.
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PMG is a global independent digital company that seeks to inspire people and brands that anything is possible. Driven by shared success, PMG uses strategy, creative, media, and insights, as well as its proprietary marketing intelligence platform Alli, to deliver Digital Made for Humans™. Our team is made up of over 500 employees globally, and our work for brands like Apple, Athleta, Best Western Hotels & Resorts, Kohler, McDonald’s, Nike, Old Navy, Sephora and Shake Shack runs across 85+ countries and has received top industry recognition from Cannes Lions to Adweek Media Plan of the Year.Ranked by Deloitte, Inc., Entrepreneur, and Adweek as one of the fastest-growing companies in the nation, PMG has grown because of its commitment to continuous improvement, business integrity, cultivating dynamic relationships, and putting people first. Named 8X Ad Age's Best Places to Work, 4X Best Places for Working Parents, Fortune's Best Workplaces for Women and Fast Company's Best Workplaces for Innovators, PMG has also been named Adweek's Breakthrough Media Agency of the Year and 2X MediaPost's Independent Agency of the Year.Find out more