The AdNews end of year Perspectives, looking back at 2023 and forward to next year.
For me there were two key themes in 2023:
Performance plateau
In 2023, the advertising world experienced what I like to call the "Performance plateau”. The direct to consumer and performance marketing juggernauts, which are used to massive year on year growth at different times of the year hit a slowdown. The biggest hit seemingly coming after everyone blew their savings budgets on European holidays, with September a soft month across the board.
Control vs. creative: The great divide
This plateau caused a notable divide within the industry. Many brands sought more control over their advertising - they invested in in-house teams, attribution and modelling tools, and they wrote and implemented scripts to fight the trend of Google and Meta pushing towards simplified and AI-controlled campaigns. Hunting for more data points to help rationalise performance trends, this control-centric approach aimed to maximise efficiency.
Conversely, a smaller minority embraced creativity and leaned into the AI features of ad platforms. They took the risk and shifted ad account structures to be simplified and invested the resource, whether in-house or via agencies, to improve creative diversification through creative workflows and testing frameworks.
These trends will morph in 2024 into two areas:
A blend of in-house and agency expertise
The cautious approach observed in 2023 is likely to persist in 2024, both among consumers and brands.
I anticipate that the trend of in-house performance marketing will continue with those who are yet to test it out.
However, the early adopters of this model are already flagging the challenges in replacing an entire agency with a single person or small team.
I expect to see a more hybrid approach, where this blend of internal and external expertise aims to harness the best of both worlds—control and creativity.
Striking the right balance between creativity and control will be a key theme in the coming year.
Digital transformations to scale
In saying this, it feels like 2024 will see one segment of brands scale significantly through digital advertising.
There’s a growing number of digital transformation projects that have worked through the teething issues in going direct to consumer. There’s a frustration with the standard campaign burst activity, and they are hungry for an always on digital advertising programs that enable them to scale.
I expect to see a big push into digital advertising channels from usually more ‘traditional advertisers’. The huge upside for these brands is their ability to already understand short and long term objectives, measurement and openness to push creative edits to foster this scale.
On the flip side, high-growth direct-to-consumer brands, which once dominated the digital advertising landscape, may begin to explore alternative channels and approaches. Expect a boom again in pop-ups and brand collaborations as they seek new ways to engage their audience beyond the digital realm, while maintaining control.
Regarding talent, while there’s a massive shift towards in-house roles that didn’t exist previously - the biggest talent crisis is a creative one.
From our position, creatives are either trained in a traditional single idea for offline that is then adapted for online with one to two edits meant to last for three to six months
OR they understand performance creative requirements, but not the fundamentals of distinction and so every brand begins to look the same.
As we enter 2024, the advertising landscape remains dynamic and challenging. The ‘performance plateau’ of 2023 forces us to rethink our strategies, focusing on the delicate balance between performance and creativity. In-house teams and agencies will increasingly collaborate to bring forth the best of both worlds.
The state of the market in 2024 is marked by cautious optimism. Brands with robust digital transformation projects are poised for growth, while direct-to-consumer brands may explore unconventional avenues. Meanwhile, the industry must continue its quest to bridge the creative talent gap, nurturing the next generation of creatives who can thrive in this digital-first era.
Chris Fraser is Managing Director of Intentional
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