From the digital advertising slowdown to Musk’s acquisition of Twitter. What changes will the “five major shocks to the advertising industry” bring about in 2023?

The survey found Google’s parent company Alphabet had its lowest growth ever, and Meta’s at its lowest ever, despite factors such as a strong dollar in favor of Google and Meta. pointed out.

“These two largest companies will experience short-term year-on-year growth lows and relatively protracted tough times,” the study said.

YouTube, one of Google’s biggest growth drivers, saw its first year-over-year decline in October 2022. Google’s advertising revenue fell by $2 billion from the second quarter to the third quarter of 2022 as advertisers cut spending.

Meta’s ad revenue is also declining. The company has spent $4 billion to build the Metaverse so far, but it has yet to turn a profit. Meta is betting big on its short-form video creation feature Reels to revive ad revenue, but so far it hasn’t made an impact on rival TikTok.

Also, the impact of Apple’s privacy settings changes in 2021 is still there. This is costing advertisers like Google and Meta billions of dollars.

But while the tech platforms are spinning, the big ad agencies are doing arguably too big. Ad agencies haven’t enjoyed the extraordinary growth that tech giants have achieved during the COVID-19 pandemic, so they’re less affected by the current economic climate, according to the Enders study. It is said that

However, the study warns that the ad agency boom will end in 2023. “For advertising as a whole, growth is objectively leveling off, and now, even for ad agencies, growth is generally slowing after the post-2021 recovery period.”

Streaming companies are getting into advertising. But is it useless for advertisers?

Netflix used to openly oppose advertising. But in 2022, the company will partner with Xandr, the ad tech unit acquired by Microsoft. As a result, he quickly launched an advertising business and shocked the industry.

Netflix has thus entered a race with the likes of NBCUniversal’s Peacock, Disney+ and HBO Max for streaming ad budgets. Each company offers plans with advertisements at low subscription fees.

But that could also leave consumers overwhelmed with options.

“Consumers are overwhelmed by the variety of platforms, deals and prices,” said David Helmreich, chief commercial officer at TV ad tech firm Innovid.

According to Helmreich, consumers will find it harder to find content they like in 2023, further fragmenting it, as content owners offer different bundles to attract subscribers. This fragmentation will also create more problems for advertisers in measuring the effectiveness of their ads across multiple platforms.

DiGroot predicts that this flood of streaming ads will fail to attract the younger consumers that advertisers want most. “Consumers under 30 prefer short-form videos over long-form Netflix series,” said DiGroot, which bodes well for TikTok’s 2023 growth forecast.

Look out for new ad sales companies like Best Buy.But I also need to prove my worth

In 2022, companies like Uber and BestBuy, which were not traditionally considered ad sellers, are launching ad businesses en masse.

Chad Engelgau, Global CEO of Acxiom, said:

“Everything is, or can be, an ad network and can use destinations. Anything that requires an email address to access it, like an Apple device, serves ads.” You can and will.”

Most of the new ad startups today are retailers, who have created a high-margin category called “retail media.” GroupM predicts the market will be worth $160 billion by 2027.

Ad tech companies like Criteo are looking to the future of their business with a focus on retail media, and companies such as The Trade Desk are aggressively entering the industry to secure retail media advertising budgets. trying to enter.

Advertisers are having a hard time finding consumers because of Apple’s privacy policy and the demise of third-party cookies. Acquiring the budgets of these advertisers is the aim of retail media operators.

But with so many choices and a tough economy, retail media companies will have to prove their worth if they want to capture advertising dollars in 2023. Many companies, like Kroger, are looking to use budgets traditionally allocated to TV.

Twitter acquisition by Elon Musk

In 2022, Elon Musk’s dramatic takeover of Twitter and subsequent layoffs (including those in the company’s revenue-generating advertising business) will transform the advertising industry. shook.

After acquiring Twitter, Musk appointed veteran Robin Wheeler as head of advertising at the company, but fired her shortly after. He was replaced by Chris Riedy in late November 2022 and is trying to convince advertisers to leave.

David Cohen, CEO of the advertising industry group IAB, said:

“In 2023, we look forward to our new management team finding a healthy balance between content moderation, safety and transparency to help Twitter serve consumers, marketers and society at large.”