2022 was a transformative year for advertisers and publishers, with significant developments across connected TV (CTV), identity, retail media and sustainability, despite economic headwinds. Heading into 2023, ad-tech advancements in these key areas will continue to shape the future of advertising.
Here are some goals, or New Year’s Resolutions, for the ad-tech industry.
Collaborate to provide better CTV experiences
Consumers continue to shift further away from linear TV toward streaming platforms at increasing rates, leading advertisers to allocate more dollars into the channel than before to engage with their target audiences in powerful, premium TV environments. eMarketer has forecasted that U.S. CTV ad spending will exceed $26 billion in 2023 up from $21 billion in 2022
The past year has been particularly momentous for the CTV industry; in July, streaming viewership exceeded cable usage for the first time, according to Nielsen. On top of that, the industry has witnessed major viewing events like live sports (NFL’s Thursday Night Football and FIFA 2022 World Cup)—which have traditionally been broadcast on linear TV transition to streaming platforms—giving consumers more reasons to cut their cable subscriptions and bringing more audiences and advertisers to CTV.
Additionally, the second half of the year saw two of the biggest streaming platforms in the world, Netflix and Disney+, announce plans to offer less expensive, ad-supported tiers. As these offerings mature in 2023, many advertisers will be eager to take advantage of the highly engaged audiences on these platforms. With these premium offerings, there will also be a renewed focus on viewer experience, including ad load and frequency.
While there is still work to be done in the channel, in the next year the industry will have to focus on addressing fragmentation, measurement and reporting challenges to provide the most frictionless experience to both consumers and buyers.
Address identity challenges via curation technology
It feels like the deadline for the deprecation of third-party cookies is a moving target, but the industry remains focused on navigating its ever-evolving complexities.
There is no silver bullet for solving the identity challenge. However, several alternatives have emerged or have gained further traction, such as new industry IDs, contextual targeting and working with publishers to reach their first-party audiences.
One solution that has seen increased adoption over the last year is curated marketplaces. A curated marketplace can be thought of as a bespoke programmatic marketplace within a larger marketplace, designed to help reduce many challenges that buyers are facing.
When it comes to identity, curated marketplaces can deliver innovative solutions across multiple identity spaces and bring more first-party data to market. Brands need access to first-party data to reach their target audiences across premium channels. Curated marketplaces allow buyers to package together multiple inventory and publisher data private marketplaces (PMPs) to access first-party data at scale.
As marketers work toward the cookieless future, there will be even more advancements from curated marketplaces to help advertisers effectively reach their consumers amid shifts in identity solutions.
Educate the industry on media sustainability
The rise of sustainable media is becoming a key driver for consumers when determining brand loyalty. According to research from Microsoft Advertising, 77% of people globally say that in five years’ time they only want to be spending money with brands who practice green and sustainable advertising.
Sustainability has been front and center throughout the past year, especially as it has been discovered that digital now has a greater share of greenhouse gas emissions than the aviation industry, and that is only continuing to grow. As a result, GroupM released its plans to develop a global framework to help reduce carbon emissions, and companies like Scope3, Good-Loop, Impact+, Tribaldata and more have emerged to help advertisers address the environmental impact of their digital advertising.
This is still relatively new for the industry, and many companies are only beginning to look at their impact, let alone understand it. Furthermore, many companies don’t have the tools or resources in place to address their carbon footprint. The industry needs to commit to working collaboratively to provide education and offer more guidance on how to reduce the environmental impact of digital advertising.
It is going to be crucial for companies to partner with organizations that are actively investing and reshaping their business to support sustainable media.
Support the growth of retail media
Retail media has been the shiny object of the advertising industry over the past year with major advancements in the space, including Kroger’s Precision Marketing platform entering the CTV space. As the year has unfolded, retailers and marketers have begun unlocking the full value of retail media.
Retail media is now a core driver of ecommerce profitability and whether you are an ecommerce behemoth or an emerging player, strategic growth in retail media will mean finding the right partner—one with flexible capabilities and deep operational expertise.
Marketers can expect that as more retailers build out their offerings, they will be looking to lean on partners that can help them tap into opportunities to provide brands with access to their first-party data and scale their programs through an omnichannel platform with inventory on-site and off.
The topics that the industry will focus on in 2023 may not be entirely new, but new innovations across CTV, identity, sustainability and retail media will impact how advertisers take advantage of these valuable opportunities going forward.
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Mike Welch is EVP and GM of Xandr, an ad technology platform powering a global marketplace for premium advertising. Welch focuses on creating an open industry alternative to solve the most significant challenges for buyers and sellers. In addition, he is responsible for driving the adoption and evolution of Xandr’s Platform and Marketplace, which include products such as Invest DSP, Monetize SSP and Curate.
