2023: The year digital ads get smart

Marketing costs and competition are rising, and attribution is getting harder without third-party cookies. Brands have a choice: work harder or work smarter. 2023 will be the year when digital ads get smart.

As 2023 approaches, it’s time to think about the future of the online ad space. It’s been a challenging few years for marketing teams. The death of the third-party cookie and enhanced privacy laws have made targeting less precise and driven up customer acquisition costs (CAC). What’s more, it’s made attribution more difficult too.

With a global recession looming, making the most of your ad spend has never been more critical. Thankfully, automation is here to help. 2023 is the year digital ads get smart with better targeting, optimization, and bidding.

2022: A challenging year for marketing teams

In many ways, digital marketing in 2022 dealt with the fallout from increased data privacy regulations and Apple’s ITP. Marketing teams have long relied on easy access to third-party data. However, marketing teams have struggled to adjust to Apple killing the third-party cookie, and Chrome intends to do the same by 2024.

Like almost everything else, the cost of digital marketing continued to climb during the year. By some estimates, customer acquisition costs have shot up by 60% over the last five years. But it isn’t to do with supply chain problems and inflation.

Without access to third-party databases, advertisers can’t:

  1. Target audiences as surgically
  2. Attribute the effect of their marketing with the same precision

The rise in marketing automation

The whole point of digital marketing is that it offers an excellent return on investment. Marketing teams have become so reliant and obsessed with performance data and metrics that they’re lost without it. But going back to the old inefficient models of gut feeling and guesswork isn’t an option.

And that’s understandable. Marketers are under pressure to justify their budget and spend it wisely: With customer acquisition costs shooting up, having a “feeling” that an ad works isn’t enough.

Brands have gotten used to generating great results from relatively minor budgets. At an executive level, why CAC is rising hasn’t led to an adjustment of expectations. Management expects their marketing teams to solve these problems, or they’ll find someone who can.

When you throw inflation, rising interest rates, and the specter of a recession on top, losing access to third-party data has come at a horrible time for marketing teams. So, it’s no wonder that in 2022, we saw marketing automation move in to fill the gaps.

Google announced the roll-out of Performance Max in November 2021, and we saw it grow in popularity through 2022. There is a lot to love about Performance Max. In many ways, it’s the culmination of Google’s attempts to make its advertising channels as low-touch as possible.

Instead of users employing different ad types and campaigns and trying to get the most from each one, Google is basically saying, “Listen, we have all this data, we have advanced algorithms, let us manage your campaigns for you.”

In an era where marketing teams have lost their “eyes and ears” of third-party data, automation seems like the next best step. They can’t go back to the gut feel and lack of precision of the old days any more than financial traders can go back to pen and paper. The situation has changed, and they must evolve or move with the times.

With the right setup and knowledge, Performance Max can produce great results. By giving Google goals and objectives, Performance Max generates ads and gets them to the right people. While it does mean less control and, for now, limited reporting, it’s a great option for less experienced advertisers.

However, it’s not perfect yet. If you don’t take the time to understand the parameters, it can actually burn through your marketing budget without generating the ROI that you need and expect. However, when you pair it with other tools, like our advertising robot, you can get an edge over your competitors with smart bidding, ad creation, and performance testing.

The metaverse

The other big marketing story in 2022 was the metaverse. Many experts suggested that 2022 would be the breakout year for virtual online worlds. The suggestion is that they would be the future of socializing, gaming, and digital marketing.

Many brands rushed out to buy land and ads in these digital spaces with the idea that it would be the best way to create high visibility and capture a new generation of users. However, things haven’t quite worked out like that.

While it’s too early to write the metaverse off, the gamble hasn’t paid off for Mark Zuckerberg’s Meta. Fifteen billion dollars of investment hasn’t translated into user numbers. The number of active users is low, but user retention figures are abysmal.

The metaverse has potential, but the whole affair shows that unless you have an unlimited marketing budget that you can afford to lose, concentrating on core marketing activities like SEO, PPC search Ads, and social media ads is still where the smart money should go.

What 2023 will bring to the digital ad space

So, that’s the state of play we find in digital ad space: Rising costs, lower consumer confidence, and BigTech innovations that could turn into a money pit precisely when executives call for marketing spending to bring more value.

So, what should you do if you’re a brand that wants its marketing spend to be more efficient?

Here are a few areas that you should concentrate on.

AI and ML to drive efficiency

While there will always be new-fangled ways to promote your business, the fact remains that search, display, and social media ads are where the bulk of the action is. It’s still where most consumers congregate, so it’s still your best chance of making the connections that will drive revenue.

Instead of trying to find new channels to increase ad revenues, 2023 will be the year that marketing teams lean further into AI to increase marketing efficiency. It’s about doing more with what you already have.

Any economic recession will remove a lot of the low-hanging fruit. Consumer confidence will be low, which means marketing teams will need to:

  • Adjust their targeting as consumer habits, and dynamics shift
  • Focus on ads that serve your core audience and reduce any secondary “nice to have” marketing
  • Automate as much as possible to save on work hours
  • Focus on revenue attribution
  • Do more with less

AI tools like ours are perfect for this environment because they allow marketing teams to wring the most value from their budget. Instead of spending days and weeks pouring over analytics data, our robot takes the burden off customers with smart ad bidding, better ad creation, and precise targeting.

Zero and first-party data

OK, so third-party data isn’t something you can rely upon anymore. That’s a shame. But zero and first-party data collection are the modern keys to better targeting and attribution.

Zero-party data collection is about customers proactively sharing information with businesses. So, expect to see more brands using polls, interviews, surveys, and forms to collect customer data that they can use to learn about customer personas and generate data to populate look-alike lists.

Similarly, first-party data collected from customers will be fundamental. User interactions like purchase behavior, social interactions, web analytics, and collected demographic information can all be leveraged to build valuable data that will drive conversions and revenues.

Multilingual marketing

While short video marketing on TikTok and YouTube shorts, along with more investment in influencers, are two trends that will continue through 2023, we think machine translation (MT) tools will significantly impact next year.

Expanding into new markets is an excellent way to generate revenue in a crowded marketplace. MT is becoming far more sophisticated. However, it can still miss the subtleties required for truly impactful marketing messages. As these tools advance and marketing teams learn to work with them more effectively, expect to see brands move into new and fruitful territories.

Conclusion

The marketing world is still in flux due to third-party data restrictions. Going back to the old ways is impossible, so brands need to find a way to push forward. AI and ML tools, like Amanda AI, offer marketing teams a way to compensate for the loss of efficiency by automating marketing.

Automation allows businesses to:

  • Optimize their ad bidding strategies
  • Test ad variations to find the most influential performers
  • Combine data from Google, Meta, and Bing Ads to improve performance
  • Target audience based on demographics and behavior
  • Build ad copy and content

Our fully autonomous advertising robot saves you time, money, and effort. Our sophisticated algorithms work tirelessly to get the best version of your ads to the right people at a time when they are ready to buy.

As sales and marketing become more challenging and competitive, you need something to give you an edge. You can’t rely on third-party data, but you can rely on Amanda AI.

Related content

Google’s automated bid strategies adjust what you pay for each ad based on the likelihood of clicks or conversions. But how can you optimize its efficiency? Let’s find out.
​Although many companies are moving towards social media, TV advertising remains an effective form of marketing. And with Netflix starting to roll out ads in several markets, they serve as a clear example to businesses that commercial ads are here to stay.
Artificial intelligence (AI) has revolutionized marketing and advertising. At Amanda AI, we’ve been helping businesses optimize their digital marketing through automated audience targeting, creatives, and behavioral analysis — and achieving spectacular results.

In this article

Stay updated

Get on the (email) list!

Stay updated

Join our newsletter