2023 was yet another transformational year in the world of digital marketing, shaped by economic uncertainty, the rising promise (and scrutiny) of AI, and shifts in how consumers find and engage with brands. While we captured many of these events in our list of predictions for 2023, others caught us by surprise (hi, Temu). And now it’s time to go on the record with our predictions for 2024. Without further adieu, here’s what New Engen experts are watching for this year.
"The impact that companies like Temu and Shein are having on the US digital ads market can not be overstated. Their massive scale and ability to spend behind a remarkably diverse set of products and categories has a gravitational effect on the market that is impossible for other advertisers to ignore. It’s tempting to hope that ‘this too shall pass’, but I’d strongly advise brands to think about long-term strategies for surviving and thriving in this new landscape. For now, these advertisers are here to stay."
1. U.S. brands will continue to face rising ad costs and competition for market share from companies like Temu and Shein. 🤼♀️
These brands substantially upped their investment in digital advertising targeting US consumers in 2023 - Brian Wieser has a fantastic writeup of this trend on his Substack in which he speculates that spend from Chinese advertisers targeting the US and Canada nearly doubled from $4B in 2022 to $7B in 2023. A similar story is playing out with Google and other publishers, as many brands have no doubt felt in their auction costs over the last 6 months. US retailers across categories will face difficult YoY comps due to these aggressive new entrants to the market, and will likely see costs accelerate even further with political advertising heating up in the back half of the year.
Brands will need to unlock a new growth lever that goes beyond “better advertising” of the same products or services. Instead, brands will need to innovate their product offerings and find new ways to tap into existing customers.
2. We’ll continue to see more agency consolidation. 🤝
Not only do these mergers create better synergy and efficiency for holding companies, they appeal to brands looking for expanded capabilities and services from their agency partners.
Within the digital marketing ecosystem specifically, the increasing maturity and centrality of digital channels are key dynamics driving consolidation. Where brands may have previously sought out specialized solutions to manage nascent digital marketing investments, as those channels & practices become core to their overall marketing program, they are now looking for partners that can deliver a holistic strategy across all digital touch-points.
Deciding factors will include capability alignment (across channels, measurement solutions, industries, etc.) and geographic expansion.
“The industry is moving from performance to digital because that’s what the market demands. Brands need to move away from agencies or strategies that focus solely on driving awareness or performance, these capabilities will need to be combined.”
1. As an agency, we will continue to drive toward a cohesive, interconnected approach to our clients’ marketing stack - even beyond areas that we manage directly. 🕸️
Subject matter experts need to be woven into the connective tissue of a brand in order to understand how specific channel initiatives will impact other marketing efforts and the business as a whole.
2. Consumers are becoming more discerning, doing extensive research, and seeking out reviews from influencers and third-party sites to validate their purchasing decisions. 🔍
This is driving a meaningful increase in the volume of affiliate content that consumers are regularly seeing and engaging with - a trend that will persist in 2024.
3. The momentum being gained in the affiliate space is likely to spark a larger conversation around the model of the channel. 🔥
And, specifically, whether or not publishers are truly earning the financial value that they’re driving for businesses.
"In 2024, successful brands will embrace privacy and lean into it by developing privacy programs: individual rights, internal awareness and training, commercial applicability, and accountability are all areas [successful] brands will and should explore. If you’ve never measured your privacy program it can feel monumental, but breaking it down into bite-sized pieces can make this process much more manageable: individual rights, internal awareness and training, commercial applicability, and accountability are all areas that brands need to be thinking about."
1. Greater synergy between AI and 1st-party data will drive a major shift, particularly as more self-service ad platforms become keen on AI. 🤝
Leveraging AI in combination with 1st-party data has been slow to catch on, yet creates opportunities to do cohort analyses and segmentation.
2. Brands will need to go beyond the privacy banner and develop comprehensive privacy programs - big brands that fail to do so are likely to face heavy fines. 🔐
There has been an influx of brands that collect consumer data without an explicit value exchange, and there’s a growing bifurcation between those who do this well and those who don’t.
At the end of the day, you are doing a disservice to consumers if you don’t prioritize their privacy at every turn.
3. A continued surge of Consumer Data Platforms (CDP) offering full-funnel measurement solutions will challenge brands to choose the right partner and avoid falling prey to “shiny object syndrome.”
"People want to be entertained, and advertisers have an opportunity to create ads that consumers actually want to engage with. Creator and influencer content is the first phase of this, but there’s still plenty of room to grow.”
1. In 2024, we’ll see breakthroughs in AI applications for creative analysis and automated content editing. 📑
For example, using AI to parse out individual frames of a video asset, analyze the content, and automatically create new variants based on what’s working to keep up with channel demands.
2. As we journey further into the age of data obfuscation, we’ll be pushed to find new ways of planning, strategizing, and designing around consumer insights. 📊
The next big shift will come from disruptive technologies and measurement tools that enable advertisers and digital marketers to better navigate this evolving landscape.
3. People want to be entertained. Advertisers will innovate new ways to engage with audiences beyond the gains made by UGC and influencer content. 🤳
“Consumers are going be picky about their money and even more focused on individualism and their own personal brand. Brands will need to be able to explain themselves in six different ways to ensure they are applicable to all consumers - consumers that are specific, layered, and complex.”
1. Niche is the new normal. Hyper-personalization, which we first tackled in 2021, will be taken to the next level as brands unlock better audience targeting (and as they continue to embrace AI). 🔑
Identifying super-specific customer segments is just the first step - brands will need to be able to back up these findings with relevant and evocative ad creative. Tailor to fit.
It will be crucial to showcase your brand in a variety of ways so that your message is applicable to each subset of your target audience.
2. Consumers are going to be picky about how they spend their money and will seek out products and brands that resonate with them on an individual, personal level. 💳
“Retail therapy” will be a coping mechanism for consumers who are feeling the weight of the world. Feelings & emotions will drive them toward wellness brands, experiences, or items curated to their unique personal style.
"Highly curated content is not resonating in the way that a lot of big brands want it to. Brand standards too often get between the low-fi content, the viral video, the trending moment, etc., and the mainstream - but we hope to see more brands embrace this anyway. After all, Gen Z’s buying power will only continue to grow, so we need to figure out how to talk to them.”
1. The gray area between “Instagram famous” and “famous” will get grayer as more influencers make the leap from social media to other digital and traditional media environments. 📸
2. #Ad #Sponsored don’t carry the same negative connotation that they once did. 📣
Consumers, especially from younger generations, won’t mind being advertised to as long as they believe the message and messenger (i.e., influencer) are authentic.
3. Retail Media Networks will continue to grow and dominate larger portions of advertising budgets - but not at the expense of social media spend. 🛍️
4. TikTok will continue to invest in the creator economy and develop new tools for both creators and advertisers. 🔨
“Now that we know that streaming is here to stay, streaming services will look to provide more value through partnerships with retail media and other offline sources. It’s no longer enough to just do branded-type plays.”
1. While the role of print media will continue to wane, traditional TV remains a cost-effective way to reach broad audiences at scale. 📡
2. We can expect to see more major networks enable programmatic-style buying across their linear inventory, and to do so at scale (like AMC has begun doing). 🍿
3. Bundles, bundles, and more bundles. Streaming services are here to stay, and they’re looking for new ways to drive value by partnering with offline sources like retail media. 👯
Verizon rolled out a Netflix/Max bundle, Instacart now comes with a Peacock subscription.Plus, targeting segments will open up as retail media networks partner with brands they don’t carry in their stores.
4. A big limitation of CTV right now is the lack of deep contextual insights, to the show-specific level, available for a given impression. 💡
Traditional TV buyers are accustomed to having this level of detail in their media buys, so we expect to see these merge and evolve the current digital offerings.