Month: December 2022

This year ended up looking quite different from what was predicted by Digiday’s editors at the beginning of 2022, but it made for a fascinating saga to follow. 

In this final episode of the year of the Digiday Podcast, hear from some of our reporters and editors on the media and media buying beats chat about their top takeaways and trends from 2022, ranging from the struggling advertising market to the ongoing battle between publishers and platforms.  

Below are highlights from the conversations, which have been lightly edited and condensed for clarity. 

The culprit of platforms’ revenue decline is not solely the economy 

Michael Bürgi, senior media buying editor: I think one big factor has been this rise of retail media networks and e-commerce as this new avenue of especially CPG advertisers, hawking their wares on these retail media network sites, where they feel they’re a little bit closer to the consumer, and therefore, could get better bang for their buck. It’s more of a performance driven kind of thing. At the same time, they are still trying to make sure that brand awareness and brand advertising goals are folded into this. So that it’s not just that short term gain you get from moving products 3 to 5% more, but also keeping people thinking about your brand in the long term. But I think that’s been a bit of a big effect this year.

Seb Joseph, senior news editor:  Thanks to Apple strangling mobile IDs, [which] are the backbone of how Facebook stood up its ad business. That’s kind of meant that there’s a big exodus in budgets there. Not necessarily because the advertising doesn’t work, just because advertisers don’t necessarily have a way of seeing that.

It’s all about direct response

Joseph: Any format that is going to show a demonstrative impact on sales or some sort of business objective is key. It always has been, but I think when there is that much more pressure on ad dollars to work harder, that stuff gets brought into sharp focus for marketers. I couldn’t say that there’s one specific or even a handful of specific [ad] formats [that buyers are prioritizing right now] because the buyers that we’re talking to all say that it’s a kaleidoscope of different ones. But it’s the ads that are linked to e-commerce. It’s the direct response ads, it’s the search ads that a lot of marketers and a lot of advertisers are leaning harder on both in Q4, but specifically going into next year, too.

Headwinds are leading to cost cutting across the industry

Joseph: The shine has definitely come off the platforms as revenue growth slows to a crawl. You’ve seen investor concerns about costs turn into demands for cuts. Meta is downsizing for the first time in its history, which I think is [about] 11,000 job cuts, 30% of its workforce. You’ve seen Google make similar moves. We’ve seen these platforms that have been essentially recession proof — for the longest time, nothing seemed to, regardless of what has happened with the economy or even in advertising, really been able to prevent these platforms from growing at a clip. I think you’re finally starting to see that come through now.

Sara Guaglione, senior media reporter: [Publishers are] feeling a lot more cost conscious than normal. Earlier this year, there was a big hiring boom. That’s definitely slowed down now to hiring freezes. There have been waves of layoffs this quarter as well, which we’ve covered in our Media Briefings and elsewhere. It seems that if there are teams out there that aren’t [directly] contributing to driving ad revenue, subscriptions [and] audience engagement, those teams are feeling more pressure than normal. Everyone seems very nervous, for good reason.

Media buyers are still cautiously optimistic about the state of the ad economy

Bürgi: The irony here is that the agencies continue to act like there’s not much of a problem. And I don’t get it because all the signals and all the headlines you read are of layoffs and cutbacks. But if you look at the latest agency prognostications from Group M or Dentsu or IPG, they’re still looking at pretty solid growth for 2022 and a short downturn in 2023. But then really rebounding quickly by the end of 2023. 

I don’t know if they’re in a state of denial, or if there’s something they know that we don’t know because they read the tea leaves so carefully, but to me, there’s just a little bit of a disconnect of what we hear and see elsewhere in the whole media communication circle, and the way agencies are looking at it.

Joseph: I guess one reason [agencies] would be so positive about it is that those businesses aren’t necessarily exposed to things like venture capital shifts, or a dampening e-commerce market in the way that the platforms are. When you talk to some of the independent analysts out there that cover this space, that’s one way they’ve tried to make sense of the fact that one side of this forecast is a lot more positive than the other.

And then you look at what Google and Facebook are putting out and it’s just a lot more conservative. They see this slowdown definitely is more [impactful to business] especially as the economic turmoil starts to really squeeze ad spending.

Publishers vs. platforms in the competition for ad dollars

Joseph: When it comes to publishers and the position they’re in to do well out of this sort of slowdown, potentially recession, particularly in terms of pitching themselves against the platforms, I think, to a degree, premium publishers are in a good position. Bloomberg has been doing some interesting things to wrestle back control over its ad tech stack. Seb [Tomich] over at The New York Times’ The Athletic, is well versed in this stuff and seems to have a good playbook on that. So I think [publishers] stand to benefit to a degree but only so much. The platforms are still strong, robust, advertising businesses, and they will figure out a way to prevent a lot of ad dollars from moving out from their businesses. 

Guaglione: It also shows why publishers are investing a lot more into channels that they own and can control, especially with all of the craziness happening at Twitter. It seems like it’s more of a reason to push into initiatives that were started earlier this year and last year, like podcasts, newsletters — ways to work with advertisers in a controlled environment, [that’s] arguably more brand safe than some of the more unpredictable changes at these platforms that are happening, as we speak. There’s always a new update. 

Digiday spoke with six marketers — we contacted over 25 but few were available, pushing off the request, citing late Q1 planning with the unpredictability of the economy — to get their goals and what they’ll be focused on next year. Here’s what marketers are hoping to change in 2023:

Consistent measurement

It should come as no surprise that marketers want better measurement in 2023. Proving out the effectiveness of ad budgets has always been important — and difficult — and it’s only gotten more so following privacy the changes following the iOS 14 update. 

“[Measurement is] the crux of all the problems,” said Zola CMO Victoria Vaynberg. “The sheer number of platforms and their shortcomings — it’s increasingly hard to understand the effectiveness of any campaign.” 

Vaynberg continued: “That coupled with trying to drive performance metrics and brand growth, all those things come back to measurement. It’s really challenging and it feels like there’s no standard in the industry. That’s the one thing I hope can evolve the most next year.” 

The economic uncertainty as well as the ongoing privacy changes and its ripple effects certainly factor into marketers’ top desire to improve measurement in the New Year. 

“We’re heading into a year with a lot of uncertainty, and it will be critical for marketers to be able to credibly connect the dots between marketing actions and business outcomes,” said Mastercard CMO Raja Rajamannar. “It will not only help prove ROI to the C-suite, but also prove that turning down marketing investments will adversely impact the business.”

When asked what she hopes will be better in 2023 with measurement NHL CMO Heidi Browning quipped, “Everything” adding that, “this year will be interesting as our industry adapts to the changes in technology and privacy laws. We also need consistent measurement and ROI case studies to validate our investment in the creator economy.” 

Metaverse and Web3 ambitions 

Improving measurement and justifying ROI also factors into newer investment opportunities like that of Web3 and the metaverse, two topics that marketers expect to continue to be buzzy next year. 

“2023 will be an important year for establishing effective measurement of nascent platforms and technologies — like the metaverse,” said Rajamannar. “This is critical for us to understand our impact and to consider future investments as part of a broader marketing mix.”

For now, marketers say they are committed to exploring Web3 and the metaverse — though whether they intend to actually do so remains to be seen. Marketers have long said that there aren’t enough use cases to build a foundation.

“As a marketing industry, we need to continue to explore, experiment and learn what works,” said Rajamannar. “Even though the looming economy can make marketers nervous about investing in newer platforms, my advice is to have a basic understanding of all emerging tech and prioritize a few technologies like AI or Web 3 and monitor the ecosystem to ensure you adjust quickly if and when needed.”

It’s a similar strategy at Roblox, where execs will focus on connecting with Gen Z, said Barbara Messing, chief marketing and employee experience officer at Roblox. “We’ll also continue enabling our developer community to expand their work with brands, share their expertise, and build virtual items and high quality immersive experiences for users to enjoy globally,” she added.

Social search and safeguards

The question of brand safety when it comes to social platforms has re-emerged as a prime concern for marketers in recent months, especially for Twitter following Elon Musk’s takeover of the platform. Marketers said they hope platforms curb misinformation and put safeguards in place.

“Social platforms have been under a lot of scrutiny from advertisers,” said Rajamannar, who later added, “We’ll have to consider carefully how to minimize reputational risk and come together as an industry to put safeguards in place.”

Another place of exploration for CMOs is TikTok and determining how to capitalize on its popular search functionality for users.

“It finally clicked to me how well search works on TikTok and how valuable that is,” said Vaynberg. “That’d be my resolution, how to best understand those two things and be the wedding experts for everyone who is searching for specific wedding content.”

Build on what’s working

Aside from recognizing the possibilities with search on TikTok, marketers are leaning into — and will continue to prioritize next year — content strategies that do well on the platform and with younger generations.

“If you’re trying to reach millennials or Gen Z on social media, a solid video strategy is a non negotiable,” said Lia Habermann, CMO of Fit Body App, adding that making sure the content appears more “raw, relatable” to resonate on platforms is key. “We’ve gone from needing to produce everything in-house to having an array of options, whether it’s reaching out to customers who’ve been posting about us or hiring UGC creators and influencers.”

Some marketers are also looking to take their creative to a new level in the New Year, building on what has been working but finding ways to stand out more.

“My resolution for the business next year is to be a bit more confident,” said Duncan Blair, CMO of direct-to-consumer furniture brand Article. “Over the course of our history, we’ve let our products speak for themselves and been a bit reticent about shouting to the rooftops about how great we are … [we’ve] earned the right to talk more boldly.”

Blair added that using bold creative with more direct messaging may be timely for the brand. “In general, quality furniture has been very expensive,” said Blair. “What’s resonated with people is that we provide great value. Going into 2023, the economic situation looking uncertain, there’s a real opportunity for us to be a bit more bold and confident.”