Navigating the advertising and marketing ecosystem in 2023

Photo Credit: Julian Hochgesang on Unsplash

The pandemic played a decisive role in shaping the advertising and marketing trends in 2022. For example, D2C e-commerce sales saw an exponential rise with people confined to their homes. We also saw the great boom in live content; brands used live videos increasingly to reach out to their TG. Performance-first campaigns became the biggest priority as there was a slowdown and constraints in post-Covid budgets.

So, how was the year that just went by like? And what does 2023 hold for the industry? While the days of tough pandemic restrictions are long over, the shadow of Covid still looms with the fresh rise of new variants in China and some other countries. Amid the threat of a global recession, what does the prognosis for the advertising and marketing ecosystem look like in the year ahead? Let us explore this along with industry experts.

“Video ads saw a drastic rise in 2022,” says Amitek Sinha, Co-founder & COO, ET Medialabs. Delving deep into the key trends, Sinha said that there are several reasons why video advertisements might perform better than static creative. One of them is that it is easier to convey a message to your TG with help of a video, there is more you can show making your idea come across more effectively.

“Vernacular creatives also took an important place. Brands realised there was no better language to employ than their own if they needed to address various audiences and cultures. The post-pandemic times saw a huge rise in Influencer marketing. Because of the increased popularity of content creation, marketers tried to employ influencer marketing to the fullest extent possible. Brands used this chance to connect with their TG because influencers frequently have large followings and a direct impact on their audiences,” he adds.

“We have always striven for campaigns that matter,” Gautam B Thakker, Chief Employee, EveryMedia Technologies, adding, “Even while ideating and executing said campaigns, we have always taken the industry slowdown coupled with the post-COVID budgets. Interestingly, influencer marketing was a huge hit for us in 2022. We ended up doing impactful campaigns for several brands and productions for a mixed bag of paid and barter collaborations. For Influencer Marketing campaigns, 2022 kick-started with a bang! With the OTT release of blockbusters. We commenced a trend campaign with influencers among all categories. Apart from these campaigns, we also undertook the campaign for India’s official selection for the Oscars. Additionally, the user-generated content helps as we extend the activities in the Metaverse while incorporating NFTs and AR/VR,” says Thakker.

For 2023, he believes in the time-tested interactive content marketing campaigns. “It will continue to be one of the reliable trends in 2023 in the world of marketing. We must emphasise on the brand’s social responsibility as well as we manage their reputation in 2023 with authentic, humanised and relatable content,” he adds.

The year 2022 saw less of an intense impact of COVID as compared to 2021 with business sectors and markets starting to open, remarks Pradeep N Dutta, Head – Branding, Advertising and Alternate Channel of Panasonic life Solutions India. According to him, there was a shift in consumer behaviour post the pandemic, as people started to venture out more giving brands an opportunity to shift and leverage back to traditional modes of advertisement like OOH and television.

“While the digital medium would keep its sheen with possible effectiveness, reach and target, brands have started using innovative TV and digital OOH. From Integration or QR codes in TV commercials to digital hoardings, brands are now looking to leave an impact on consumers. PPC marketing has been a most effective and transformative tool for marketers. This strategy has seen a dramatic rise since the beginning of the pandemic, and has since then become an effective way to maximise a marketing budget. Marketers search for performance and cost-effective measures to target the right customers, as well as the ability to easily measure return on investment (ROI), which makes it easier to identify campaign efficiency and justify ad spending,” says Dutta.

He predicts that purpose-driven advertising, rapid and clear communication, a customer-centric strategy, and the utilisation of digital commerce/ Meta will pave the way for the next five years. He further points out that it has also been equally important to maximise the use of the data for ad optimisation by:

Targeting customer through the data gathered at multiple touchpoints
Minimising customer touchpoint friction and maximize digital sales opportunities
Creating tailored online marketing ad campaigns
Automating personalised email offerings
Retargeting campaigns to build recall
Focusing marketing campaigns on customer retention

“One key trend that’s going to happen in 2023 is brands getting ready for the post-cookie world,” predicts Mihir Karkare, Cofounder and EVP, Mirum India. “We know it’s coming, and all brands are going to make sure they are ready for it. It will involve investing in CDPs, figuring out how all your customer data is connected – no more silos, that’s going to be a big focus area. Personalisation across channels is going to go mainstream, once the CDP comes into picture. For example, activities that you do on one channel are going to be impacting what you see on other channels. There’s also going to be a huge focus on privacy as regulations come into place, which I think is going to be a good move for the industry,” Karkare adds.

Top trends in 2023

According to Pradeep N Dutta the top trends in 2023 in the marketing and advertising field are:

Multi-search

The search engine often consumes more than 82% of a consumer's time for which Google launched multi search to help with this. It provided various supporting algorithms with the goal of improving how we consume and find information.

It is interesting to see how multi-search has assisted marketers in capitalising on the greatest untapped potential. Customers can use Google Lens to discover everything there is to know about any snapshot. Google can deliver more relevant search results faster by combining entity data with high-quality, relevant, and contextual images.

In 2023, marketers will employ a variety of assets, including the Google Vision API and entity data, to provide the most accurate and high-quality assets. The key to opening doors and succeeding in 2023 is to create digital assets that are future-proofed for discovery.

Experiential marketing

Getting the attention of consumers has become more difficult than ever. Because of this, all marketers have embraced experiential marketing. Experiential marketing conveys the message without interruptions; it engages consumers directly, motivates participation, and links them with the brand, resulting in a unique and dynamic branded experience.

Interactive ads

AR and more interactive ad formats are leading to new opportunities for brands that will engage users in all new ways. Many platforms are already experimenting with this technology. Meta seeks to guide users into the next stage, these types of next-level ads will be a stepping stone and would help more brands lean into this trend.

Programmatic advertising

Using AI to automate ad buying. Advertisers can more precisely target their intended consumers using AI-assisted programmatic advertising. By removing humans from ad buying, companies receive a more reliable and cost-effective solution to their needs.

According to Amitek Sinha, WhatsApp commerce and ads (CTWA) will undoubtedly experience a big increase in 2023. He points out that WhatsApp shopping ads are still very new on the market, but they may be a very effective tool for marketers.

“As mentioned already, influencer marketing will definitely become way bigger compared to last year with an increase in the content being produced on a daily basis. Artificial Intelligence will definitely be powering advertising in the coming year. AI impacts different domains of marketing such as content creation, product recommendations, better customer service, and more. Along with that, reels & short video ads will continue to do well for sure,” he adds.

Video is the star

Video became more and more effective with the growth of reels showing massive improvement in CTR. The trend will continue in 2023, say industry experts.

Short-format video has blown up on the digital media front, says Gautam B Thakker. “With Reels becoming the gold standard of the highest engaging content, clearly surpassing static posts, we have recorded a significant increase on the CTR front. These digital media trajectories will continue to trend in 2023. The ever-decreasing attention span surely helps.”

Mihir Karkare is certain that this trend will continue. TikTok, Instagram and other platforms have made this format of Reels ubiquitous, he says. “We will thus see this sort of format becoming more prevalent in other places as well – an example could be the e-commerce sites. My sense is that they are going to adopt this kind of user experience quite extensively,” he adds.

Video material is more dynamic and interesting to audiences, points out Pradeep N Dutta. Video marketing, according to him, is about fitting a lot of material and value even into a little video, regardless of whether it is intended to entertain or educate.

He asserts that one of the most influential social media platforms today is video. “There are many applications for video platforms. Around 2.1 billion people use YouTube; and every minute, 500 hours of new content is posted to the site. When it comes to daily views, YouTube Shorts have exceeded the 15-billion milestone. Looking at the figures, we can be assured that video marketing will continue to grow and remain in trend in the coming year,” he adds.

Concurring with the views about the videos, Amitek Sinha says that previously Instagram was known primarily as a photo-sharing platform. After the pandemic, the content shared on Instagram observed a drastic shift, with the introduction of Reels, he adds.

“Within a few months of its launch, most users started creating Reels and even brands started showing a preference for reels. Over the past year, search interest for Instagram Reels has eclipsed that of Instagram Stories, reaching peak popularity around the first week of 2022. Every day there are around six million Reels being uploaded. Further, with the constant changes in Instagram algorithm, content creators observed how Instagram was only pushing Reels, and static images were no longer getting the reach they previously got. Moving forward, reels will definitely continue to perform well,” he adds.

The role of AI

We have seen the efficacy of conversational marketing (with chat bots getting smarter with AI and NLP). Going forward, Artificial Intelligence will play a crucial role in marketing and advertising.

“AI refers to the simulation of human intelligence in machines. This wide-ranging branch of computer science is set to transform jobs in marketing and the industry as a whole in a lot of ways. AI in chat-bots has mitigated the requirement of human resources and has made the process much more efficient and quicker,” says Amitek Sinha.

In advertising, he adds, as in other industries, AI is focused on using machines to ‘mimic’ human intelligence by programming them to think and respond in the same way humans do. This is achieved by exploring historical data to determine certain behavioral patterns and make smarter decisions.

The result, according to Sinha, is:

More personalised encounters with brands
Highly targeted, more sophisticated advertising
Easy identification of thought leaders and influencers
Quick, but informed decision-making

AI has a significant role in designing a user’s experience, says Pradeep N Dutta. AI makes use of pertinent data, such as buying habits, website visits, and page views, to offer products that certain customers will find interesting, he adds.

He explains that digital marketing initiatives powered by Artificial Intelligence have a higher chance of succeeding since they can deliver quicker and more precise insights on consumer behaviour.

“Businesses can provide more engaging interactions while gaining insightful information about their target audience by utilising AI technology like Natural Language Processing (NLP). NLP analyses client intent and generates customised responses. Due to their ability to create individual experiences at scale, conversion rates may eventually rise. The loss of customisation is one potential drawback of the growing usage of AI in digital marketing. Personalised marketing experiences might be possible without human input as AI algorithms advance in sophistication. This may lead to a more general, one-size-fits-all marketing strategy, which might drive away some clients,” explains Dutta.

According to him, the collaboration of AI into digital marketing is a trend that is here to stay. “AI technology will become an increasingly crucial tool for companies trying to boost their marketing efforts and acquire a competitive edge as it continues to develop. AI has the potential to completely change the way that digital marketing is carried out thanks to its capacity for large-scale data analysis, the production of top-notch content, and personalised customer support,” he concludes.

AI has and always will play a crucial role in 2023, asserts Gautam B Thakker. With the advent of the IT industry, he adds, the boost in SaaS enterprise solutions has been a game changer. “These AI-powered tools provide better insight into audiences that eventually help us in crafting more impactful integrated marketing communications campaigns. They provide the superpower of guiding through content ideas and generation concepts faster and more efficiently than human capabilities. AI has also increased the scope for personalisation and also helps us perceive sentiment through the analysis. Eventually, the feedback lies with the end-user as the customer, and they have expressed that they don’t want to feel that they’re marketed to. Since then, marketers are forced to accept this switch. Marketers need to offer people something beneficial in return for their information,” he explains.

It’s going to reshape how marketing is going to happen in the next two years, opines Mihir Karkare. “Each of us marketers and agency folks, we really need to rethink and recalibrate how we work, how we do the work that we do, and what is the value we are bringing to the table. Rather than worrying about whether AI is going to take over creativity and so on, we need to adapt so that AI becomes an ally for us,” he adds.

Will Metaverse ads become commonplace in 2023?

We should now talk about the role of Metaverse in the advertising and marketing domain. Metaverse provides immense possibilities for marketers. In fact, brands are yet to explore the full potential of it. Soon we will get to see ads in the Metaverse, such as virtual billboards.

“Metaverse is our best way to get on the Web 3.0 bandwagon,” says Gautam B Thakker. Like all things that end up getting commercialised, so will the Metaverse and the rest of the Web 3.0 properties, he adds.

“The industry finds a way to generate a revenue stream and what better than ads on all fronts – Social, digital, print, offline, and now, Metaverse marketing? As virtual brand presence becomes increasingly crucial, so will the ads in the same space. Brands must redefine how they connect with the end consumer and this is just another add-on to an already-extensive list of ways to reach out. Opportunities are endless. Imagine virtual billboards! In order to stay relevant, brands will be forced to start marketing in the Metaverse sooner than they think, and the sooner they start, the better it will be for them,” says Thakker.

The much-anticipated Metaverse is still a relatively fresh and unique concept, especially for marketers and companies, opines Pradeep N Dutta. However, he adds, a wide range of enterprises can profit from this technology because it gives them the freedom to experiment without restrictions and test out novel advertising strategies.

“When businesses learn to construct novel realities that they can share with their target markets, a new era of marketing will start. Brands still have time to fully leverage the Metaverse's marketing potential, since we can already envisage a future where bitcoin is used for virtual economic exchange. Metaverse will enable businesses to construct new realities and usher in a new era of marketing as it provides its users with a space to study, build, explore, share, and buy,” he adds.

Ads becoming commonplace on a channel is a function of adoption of that channel by consumers, points out Mihir Karkare. “Now, when it comes to the Metaverse, I believe adoption is going to happen differently for different target groups (TG). For example, if the TG you want to target is into gaming, you will have no choice but to increase your marketing and advertising spends in the Metaverse. But if there is a different TG, you need to see how they adopt this new channel and decide whether to advertise there or not.”

What marketers should know when they market on the Metaverse in 2023?

“Recently we concluded the launch campaign for a brand on Web 3.0, where we employed exhaustive touchpoints where we created awareness and the massive campaign was all over the news. What we learnt through this campaign is that key touchpoints are a great way to introduce the average Joe to the metaverse and its applications. All in all, marketers should strive for more and more ways to indulge in consumer-led campaigns for interaction and engagement. Metaverse marketing can only be beneficial if implemented in the right way,” opines Gautam B Thakker.

Mihir Karkare thinks that first and the most fundamental part that marketers need to know is to find out where their audience is and then be clear about what your objective is when they are deciding to market on the Metaverse. “Once these are clear, start,” he says.