There’s no doubt that the advertising industry is facing strong headwinds as we approach the year’s end. Consumer spending is down, inflation is up, and there’s a looming recession.
These challenges will require marketers to remain nimble: an eMarketer study found 50% of US marketing leaders plan to change their marketing channel investments in the next six months as a result of the economic outlook. We’ve never experienced this level of agility with the hefty scale of digital advertising today.
With challenges come opportunities. Though MAGNA reduced its overall 2023 advertising forecast, it still expects digital ad sales to grow by 10.5%. This is in large part due to connected TV (CTV), which will see 33% growth in 2023 thanks to new entrants and a booming ad-supported streaming market.
To help guide your plans, our team is sharing their top programmatic ad trends and predictions for 2023.
Prioritising efficiency in an uncertain economy
The most overarching of the programmatic ad trends that we’ll see next year is marketers finding creative ways to maximise their resources. With budgets under scrutiny, marketers will focus on efficiency and prioritise measurable, performance-based media investments.
“Next year is all about doing more with less. We’re going to see a lot of creativity as media buyers focus more on performance and hone their strategies across channels to find the best way to communicate with consumers while making the most of their budgets. Marketers will continue to shift more spend to video and CTV—particularly programmatic—but will keep a sharper eye on growing their investments efficiently.”
Evan Krauss, SVP, buyer development
Index Exchange
Realising the true value of automation in CTV
CTV viewership has surged across all demographics—nearly 84% of all US households use a CTV. But it’s important to remember that CTV is still in its early innings with ad spend lagging viewership.
While the industry undoubtedly needs to continue to innovate to deliver the optimal buying and viewing experience, we’ll see existing improvements to ad podding, signalling, and standardisation come to fruition and accelerate a shift in media spend in 2023.
“The last two years were all about scaling CTV viewership. The next two will be about scaling the ad market. The economic model of the TV business continues to change, pushing broadcasters to invest more in their streaming businesses and marketers to shift their ad dollars away from linear to streaming. Now it’s up to the ad tech industry to implement the technology and standards that will unlock scale and value on both sides of the market and help CTV ad spend catch up to viewer behaviour.”
Jason DeMarco, VP of CTV
Index Exchange
Viewers don’t differentiate between streaming and linear TV—they simply tune in. As media buyers similarly consider the consumer experience, technology and automation will be able to facilitate more holistic and addressable TV buys.
“TV monetisation is becoming increasingly automated. We have the convergence of two things: consumers shifting behaviour from scheduled programming to on-demand viewing and the ability for smart TVs to stitch programmatically sourced ads into any content that they’re displaying. The net result will be a more addressable content stream for each TV viewer, with ads sourced from both traditional and programmatic demand sources in a seamless fashion.”
Rob Hazan, senior director of product
Index Exchange
Improving transparency and measurement in maturing channels
One of the key programmatic ad trends next year will be improving transparency and measurement to provide marketers with visibility into where their ad spend is going. In CTV, OpenRTB 2.6 was a major step in providing a consistent way to signal content information, and paves the way for media owners to deliver improved transparency.
“Attracting more TV budgets to programmatic pipes requires increased transparency and measurement. Media buyers want more clarity into the content that their CTV ads are running against—just as they have in linear TV—for brand suitability, proper attribution, and optimisation. In 2023, we’ll see more media owners sharing contextual data, including genre, channel, network, series, and TV rating information, as it has a direct correlation with increased revenue.”
Sarah Botherway, director of partner development
Index Exchange
Building a fair mobile ad marketplace
Next year will finally accelerate the trend toward fair monetisation in the mobile ecosystem. Shifting market dynamics are increasing the importance of ad monetisation and will encourage a transparent and balanced marketplace outside of the existing walled gardens.
“The performance market will continue to be squeezed. Apple will likely build out a full ad tech stack to take advantage of ‘their’ first-party data. Google will progress the Privacy Sandbox by incorporating feedback from all parties. Both will face pressure from regulators. To weather the storm, developers will stand up their own programmatic solutions. Their user acquisition and ad monetisation teams will need to work together to drive efficiency, as achieving ROAS goals and maintaining waterfalls won’t be enough to survive. We’ll see better controls over ad monetisation and greater adoption of in-app bidding. These market dynamics will usher in an era that requires transparent and fair markets that can not only exist, but thrive, outside of walled gardens and content fortresses.”
Steve Roach, head of mobile app sales
Index Exchange
Ready to shape your 2023 plans? Our team is here to help. We’ll guide you through the programmatic ad trends to come and arm you with an action plan to prepare for a successful year.
