By Anand Gopal
The year 2022 brought both illumination and turbulence to the global ad-tech industry. Big tech and big media companies attempted to rethink their revenue strategies to find better ways to connect with their customers. Industry titans have turned over a new leaf in advertising, with Netflix launching its ad-supported model and Apple reportedly developing its demand-side platform.
While focusing on data and customer retention helped several brands get through 2022, industry players must find ways to deal with identity, measurement, and privacy challenges in 2023. Brands should reconsider their revenue and advertising strategies in the coming years.
Here are the five key trends and takeaways for brands that will dominate the ad-tech space this year.
First-party data and contextual targeting
In 2023, there will be a clear shift towards contextual targeting and reliance on first-party data. Publishers with a wealth of first-party data will have more opportunities to effectively monetize their content. Others must prioritize the development of a first-party database. Third-party cookie loss due to privacy concerns is a challenge that brands must overcome in order to build a rich first-party database for improved contextual targeting.
In 2023, you might expect publishers to prioritize privacy and experiment with solutions such as data clean rooms, customer data platforms (CDP), and unique identifiers to create tailored advertising for their customers and improve return on investment (ROI) on ad spend.
Advertising on CTV (Connected TV)
CTV’s popularity as a medium for consuming content has skyrocketed in recent years and will continue to pique the interest of advertisers and publishers. Brands and content owners, on the other hand, must consider providing a premium experience while also adapting to the ever-changing landscape of consumer behavior.
In 2023, there will be an increase in CTV partnerships across the content value chain. We believe agencies will set aside funds for CTV advertising. We can also anticipate an increase in cross-channel management firms that will simplify Automatic Content Recognition (ACR) to assist advertisers in improving data transparency in their campaigns.
Direct sales
Direct sales can drive a specific type of spending and provide advertisers with a more personal relationship with their customers. Brands tell their stories through multiple campaigns and create memorable consumer experiences. To solve the problem, media organizations can also form direct relationships with agencies or brands through sustained ad spend.
According to a DoubleVerify survey, 88% of publishers want to sell directly and rely more on their premium first-party data to make their inventory more appealing to advertisers.
In 2023, we anticipate that more publishers will try to break into the direct game and drive revenue growth. Brands will combine direct sales and programmatic marketing to create a hybrid strategy that will unlock revenue growth while deepening relationships with key buyers.
Developing retail media networks
Retail media networks provide advertisers with access to a retailer’s premium first-party data as well as the unique ability to connect with consumers across multiple touchpoints in their purchasing journey in a data-safe environment. As a result, retailers can generate significant revenue via this channel. As a result, retailers are either focusing on building in-house retail media networks (RMN) or optimizing their RMN strategy.
This year, we anticipate tremendous growth in RMN. To scale revenues, retailers will focus on improving user experience, accounting for accurate attribution, and maximizing objectives using rich first-party data.
In-game advertising
Advertisers are interested in the gaming market because of the opportunities it provides for attention-based marketing. With the introduction of 5G, immersive gaming, and the metaverse, the gaming market has become a treasure trove of untapped opportunities for advertisers. Because of the high engagement rate, in-game advertising is a profitable avenue for advertisers. The figures speak for themselves. According to Lumikai’s annual State of India Gaming Report (2021-22), India’s gaming market is expected to reach $8.6 billion by 2027, with casual gaming average revenue per user (ARPUs) reaching Rs 268 by 2024-25.
We expect gaming platforms to amp up their in-game advertising strategy in 2023. Brands will approach streamers who have aced their brand-user collaboration game. Gaming companies will have to develop more innovative ways to create a long-term and sustainable business model.
Conclusion
2023 is set to bring significant changes in the ad-tech industry. Brands that find their niche and focus on performant advertising based on data have a better chance of waving the storm. Adapting to evolving market dynamics and being innovative in tech will enable brands to receive better ROI for their ad spends in 2023.
The author is the chief operating officer (COO) of Voiro
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