Perspective - Increased innovation to meet client performance goals 

If 2023 was the year of setting the platform for growth and innovation in digital advertising, 2024 will be about the expansion of new technology and the even better application of data-led media buying. 

The global advertising industry has enjoyed little respite from the serial economic and political upheavals of recent years. There is no doubt that uncertainty has increased in the digital marketing and advertising markets, even as new channels explode. Clients have continued to stick with existing agencies while seeking more savings from technology vendors. For agencies, there was an increased focus in 2023 on developing strategies to manage a tougher spending outlook, rising media fragmentation, and the move to a privacy-first web. 

In that context, the development of digital skills and analytical capabilities defined the agency landscape in 2023. Ongoing change presented agencies with the task of keeping up with volatility and evolving demands. By some evaluations, the very basics of how digital advertising works are in play, defined by the move to a more challenging ad targeting landscape next year when the Google Chrome cookie begins to expire. 

Brands will intensify efforts to retain customers 

In 2024, global ad spend is forecast to rise 8.2% to reach US$1trn. However, the battle for ad dollars in a challenging global economy will result in brands relying on machine learning software to assess digital ad campaign performance. 

In an uncertain economy, brands should focus on maintaining existing relationships and re-engaging customers who have drifted away. According to research firm Gartner, the strongest growth channels will be in-game advertising, digital video, influencer marketing, digital display,  SEO, and retail media networks. As brands adopt a multi-channel approach to maximise their reach, the increasing volume of screens or touchpoints a user may funnel through before completing an action will see advertisers focus on attention. 

First-party data will rise in prominence 

Marketers are prioritising 1st-party data in their strategies due to stricter privacy regulations, the decline of 3rd-party cookies, and increased customer trust and privacy concerns. This will define digital advertising in the 2020’s. Advertisers will increasingly combine first-party and probabilistic data to navigate the post-cookie tracking era and maintain effective targeting strategies. 

Advertisers are now seeking to establish a foundation for a cookieless strategy into 2024, while also ensuring their creative campaign assets are enhanced to deliver the best possible performance. The deployment of first-party data will help brands manage their customer acquisition strategies, deploy loyalty, retention, and upsell initiatives, and implement win-back tactics, such as promotions, discounts and other value drivers to win back churned customers.

AI-powered marketing will become the norm 

Marketers will increasingly rely on AI-powered technologies to analyse vast amounts of data, uncover actionable insights, and automate repetitive tasks, enabling more efficient and effective campaign management. 

The impact of AI will include the giant search market. Google and Microsoft are racing to transform the search experience by introducing Generative AI search engines. In the US, 45 million professional workers represent 58% of Gen AI users, which will climb to 70.6% in 2025, according to eMarketer forecasts. In digital advertising, we will see AI being used to help predict which combination of ads performs best in real-time based on signals available in the bid stream.

The Consumer Wants Value from Digital 

Consumers are seeking lower prices and delaying purchases as their spending power decreases. Marketers will need to align with the potential downturn in spending power by being more strategic to minimise wastage. Consumers are reacting negatively to poor loyalty programs, substandard online customer experience and have concerns over data privacy. Brands will need to work on all three issues in order to be successful. 

In the current operating environment, consumers want to be safe and they want to be entertained via compelling offers, great video ads, and personalised ad experiences. Expect programmatic ad spending to experience strong growth across display, digital out-of-home, and podcasting next year. Detailed audience analysis mid- and post-campaign will become more vital than ever. 

Be Global, Act Locally 

Global developments in media and big tech will have significant implications for the Australian market. While the digital ad market will reach a new peak, the rate of growth is slowing. Growth must come by taking share from others—so players are expanding into each others’ areas. Those battlegrounds will broadly include media, advertising and commerce, led by the explosive growth in retail media. However, across the market, the majority of media consumption has already moved to digital, which means their target audiences are already online. One industry will stand out - gaming. It will capture a growing share of time spent with the media, and it will be led by the older demographic, not Gen Z. 

In summary, heading into 2024, return on ad spend (ROAS) and performance are going to be top of mind for brands and advertisers. Brands will seek to streamline their media buying strategies across a greater volume of programmatic channels, and attribution across multi-channel buys will help drive that success forward for brands.  

Berina Colakovic is Director of Sales APAC at StackAdapt