Capabilities, Platform Updates, and Key Considerations
Media planning for 2023 is well underway. As the landscape continues to evolve, platforms launch and release new capabilities, and fragmentation and privacy concerns shift, there’s a lot to consider.
Read on for a high-level snapshot of what KSM’s channel experts are focused on for next year. Interested in diving deeper? Drop us a line at firstname.lastname@example.org and we’ll be happy to share more perspective.
With more ways to watch, platforms to choose from, and methods to serve ads, fragmentation of the video space is at an all-time high. But don’t fret. A holistic and data-driven approach is still possible to maintain efficiency and reduce wasted impressions.
This past July, in a first for the video space, the total time U.S. viewers spent streaming surpassed their time watching broadcast or cable—but only by 0.4%. It’s a milestone, but also a reminder of the fact that broadcast and cable are still video powerhouses. For further proof of that, look no further than NextGen TV, the future of over-the-air TV that combines live broadcast TV with internet-broadcast ads. It made a big step forward in 2022 with 55 TV markets (and counting) now implementing this technology. NextGen TV 3.0’s use of a chip is also an exciting development, and means linear TV could become available on Android phones, cars, or other chip-compatible locations. The rise of programmatically-purchased linear TV ads also continues; in 2021, KSM participated in a first-to-market execution of national, programmatically-purchased linear TV in partnership with AMC and The Trade Desk. This year that technology expanded to allow advertisers to programmatically purchase linear TV at the local level, opening up this option to a wider range of regional brands and making it a capability worth continued testing in 2023.
Back to streaming, exciting developments continue there as well, with both Netflix and Disney+ adding ad-supported tiers to their platforms this year. Netflix’s ad tier is already live, and Disney launches on December 8, joining Hulu, HBO Max, Sling, Peacock, Paramount+, and Pluto TV in the race to better monetize streaming audiences. While growth in those audiences may not be increasing at the same exponential rate we saw during the beginning of the pandemic, there is still noteworthy growth happening: Nielsen reported that time spent with streaming video in June grew year-over-year by 23.5%. Additionally, 83% of Americans are subscribed to at least one SVOD, with Netflix, Hulu, and Amazon Prime continuing to dominate: 23%, 6%, and 5% of users respectively call these channels their “default source for TV.” However, as platforms continue to increase prices in order to fund increasingly expensive content (Amazon Prime Video’s Rings of Power series cost a whopping $485MM to film, nearly twice as expensive as the original Lord of the Rings Trilogy), we’re seeing consumers more finely curate their subscriptions, limiting themselves to the platforms with the content they want to watch most.
So if content, not platform, is king, how should marketers deal with the still-growing fragmentation in the video space? Whether the conversation focuses on linear versus digital TV, national versus local publishers, or even device choices and platform updates, the swirl can provide a lot for marketers to chew on. For example, placing one ad next to The Voice means considering purchasing through national NBC, the local NBC affiliate, Peacock, YouTube TV, and/or Roku, all while balancing reach, frequency, and cost. The data is there to manage this fragmentation, but it requires advertisers to think holistically, really know their target audience, and manage effective communications with the whole marketing team. There are, however, two key upsides to all this fragmentation: firstly, Nielsen’s updated measurement system moves cable, antenna, DBS, and broadcast towards impression-based buying, making comparison with streaming easier. Second, more “digital” executions means more reporting capabilities, which is continuing to strengthen video’s bottom-funnel capabilities as we look to the road ahead.
Sports viewing is fragmenting too, especially with the move of Thursday Night Football to Amazon Prime Video. College athletes are primed to be the next wave of influencers, and women’s sports continue to rise in popularity.
In 2022, the Big Ten made a record TV deal for more than $7B over seven years, giving the broadcast rights to Big Ten men’s and women’s football, basketball, softball, baseball, and volleyball to CBS, FOX, and NBC (including Peacock). This includes 112 football games each year, with 8 games on streaming only. This comes alongside a new NCAA policy giving college athletes the opportunities to monetize NIL (Name Image Likeness), granting athletes the ability to make endorsement deals, paid appearances, and more. This new policy provides an opportunity for advertisers to engage influencer athletes on the rise before their career (and their price tag) takes off.
For pro sports, Amazon Prime TV is now the exclusive home of Thursday Night Football, with the exception of those in the broadcast DMA of each team playing that night, and bars and restaurants which are able to show games thanks to a deal with Direct TV. This move to streaming is a big deal for the popular football showcase, and initial reports indicate that viewership is averaging around 11M each week, including a sizable increase in the 18-34 demo versus linear viewing. Looking at other key streaming sports deals, Apple secured the rights this year to select MLB games along with a massive 10-year deal for all MLS games, and Hulu continues to market its live TV package hard with an emphasis on sports. Whether or not more sports programs move to streaming-only is left to be seen, but it seems a balance will remain for the forseeable future as sports continue to be a huge draw for broadcasters. In the NHL, new Digitally Enhanced Dasherboards have been adopted league-wide, providing more immersive, longer-form messaging for those watching the game on television. And in stadiums of all kinds, fans continue to demand authentic connections, communal spaces, and value during their visit. From the minor leagues to the professional levels, properties are adding sponsorship-ready clubs, lounges, playgrounds, and other experiences within arenas to boost fan engagement.
Another trend worth watching is the rise in popularity and viewership of women’s sports across both pro and collegiate settings. This year’s NCAA Women’s Basketball Tournament saw year-over-year viewership growth of between 18-20% across key matchups. Partnerships in these enviroments can be cost efficient, and provide brands the opportunity to highlight their commitment to supporting equality in sports. Just keep in mind that ROI and impact should be measured over time, meaning most brands would benefit from considering multi-year terms to grow with their partnerships.
Gamers are a large, diverse audience, but very few advertising dollars are being spent on gaming inventory. Smart marketers can think beyond mobile games and find valuable opportunities in some of gamers’ favorite places.
The rise of e-sports over the last few years has brought additional attention to the gaming world, but very few advertisers are taking advantage of this massive community. When looking at total audience time spent with TV, streaming, and gaming in the U.S., 56% of it is spent gaming but only 2% of advertising dollars are spent on gaming inventory. Given that 214M Americans identify as gamers, there is a huge opportunity to reach an audience that is growing more diverse every day.
So what ads are available in gaming inventory? Think beyond mobile game ads, and instead start thinking about billboards around a racetrack in Forza Horizon, a takeover of a football stadium in Madden, or bus shelter ads in futuristic Detroit: Become Human. Finding the right gaming property for your brand is key and has the potential to be differentiating. And with the ability to purchase these ads programmatically, advertisers can leverage heaps of data to find the right fit.
The pandemic ushered in the dominance of digital audio, and new technology continues to expand targeting and reporting capabilities for online formats, including podcasting. That said, terrestrial continues to evolve to meet consumers wherever and whenever they are.
While terrestrial radio has mostly rebounded post-Covid, it still hasn’t reclaimed the 55% share of listenership it enjoyed pre-Covid. In fact, digital audio now accounts for 57% of total audio listening. This dynamic is pushing terrestrial radio stations to adapt and reach listeners beyond just their cars. Now, many terrestrial stations are available on mobile, desktop, smart speakers, and more, providing listeners access to their favorite programs and personalities no matter where they are.
Streaming audio is also moving to reach consumers in new places—major publishers like iHeart and SXM Media are providing social media extensions to increase reach and audience interactions. Interactive audio ads also provide a boost in audience engagement, either through voice commands, such as Amazon’s interactive ads via Alexa, or mobile shake-tech that allows listeners to shake their devices in order to trigger a desired ad interaction. Reporting capabilities connected to these ads continue to expand audio as an element for direct response campaigns.
Podcast spending continues to grow beyond its formerly niche status, and is expecting to exceed $2B in 2023. According to Nielsen’s “Podcast Ad Effectiveness: Best Practices for Key Industries” study, podcast ads increased brand awareness and brand affinity at a staggering rate—with a 79% lift in aided awareness, and nearly 50% of listeners saying they intended to seek more information about a brand. Surprisingly, the ads were found to be more effective among the 50+ age group, despite the average listener skewing younger.
To support advertiser’s needs as this space grows, podcast vendors are expanding reporting, allowing advertisers to look beyond shaky metrics like downloads and instead measure completes and listen-through rates. Programmatic technology also continues to evolve, allowing even more targeting granularity such as targeting by podcast name or specifically targeting smart speakers. And AI tech is being deployed to transcribe podcast content, adding to contextual targeting capabilities.
Finally, YouTube Audio continues to quietly dominate the digital audio space, with more total time spent on YouTube Audio than Pandora, Spotify, or Sirius XM combined for music, music video, and podcast content. This widespread adoption makes sense given that YouTube Music replaced GooglePlay in 2020, making it the default listener app for Android users, and considering the prevalence of both the YouTube.com and YouTube Music app. But the fact that ads are still technically in beta means it has flown under the radar for many advertisers. That said, in 81% of measured (beta) campaigns, YouTube Audio ads drove a lift in brand awareness. Add that fact to the dynamic CPMs that can deliver lower costs compared to other platforms, and it’s clear that this is a platform for marketers to watch and test in 2023.
OOH is back after a pandemic plunge, and new capabilities, locations, and formats are becoming available. 3D and anamorphic executions in Tokyo and Times Square are wowing viewers and providing brands who have the creativity—and the cash—an exciting opportunity to resonate with consumers beyond the traditional 14×48 bulletin.
While the pandemic caused OOH advertising to take a huge dip in 2020, 2021 saw an OOH renaissance. 2022 not only continued with this trend, but also delivered an uptick in ad spend that nearly matched pre-pandemic spend levels. Programmatic OOH investment has quadrupled in the past three years, thanks to real-time bidding, placement flexibility, and increased targeting and measurement capabilities. The QR code, which was revived almost entierly by the pandemic (and possibly a slew of creative Super Bowl ads), is getting additional life in OOH executions as they create compelling, actionable, and trackable content. Just keep in mind that, for obvious reasons, these are best used in static, street-level tactics like bus shelters as opposed to drive-past bulletins or shifting digital content.
While advertising on gas station screens has been around for a while, advertising on EV charging stations are a growing opportunity as they continue to pop up around the country. Given that these stations are often located outside essential businesses like groceries and pharmacies, and the fact that major car manufacturers like Ford expect 40-50% of global vehicle volume to be fully electric by 2030, we’re keeping a close eye on this inventory.
Finally, OOH has become a lot flashier in the last two years. A trend that started with this cat in Tokyo in 2021 has led to an anamorphic execution in Times Square that in 2022 hosted brands such as BMW, HBO’s House of the Dragon, and more. These impressive ads tap the power of optical illusions to give viewers the impression they’re seeing 3D images pop out of screens, and could lead to a viral moment for advertisers with the right budget and a great creative hook.
The purpose of social media is evolving beyond just keeping in touch with friends and family, as consumers flock to social for entertainment and brand discovery. The demographics of apps are changing as well, with Gen Z in particular looking for more authentic experiences.
Social media use is at its highest ever, with the average consumer spending 147 minutes each day on social and using 7.5 apps per month. While connection was the primary reason for use during the pandemic, consumers are now turning to social media primarily for entertainment. Short form video has exploded across TikTok, Meta, and YouTube Shorts, and platforms are racing to cultivate influencers and content creators. Influencers themselves continue to be a strong investment for advertisers, generating an average ROI of $6.50 for every dollar invested. And with 49% of consumers depending on influencers for product recommendations, it makes sense that over 70% of marketers are planning on increasing influencer marketing budgets in 2023.
However, audience behavior and platform use are changing. TikTok, previously heralded as the app of choice for Gen Z, is now seeing their audience skew older, with the 25+ audience growing 600% in the last 18 months. On Pinterest, the male audience has grown 40% YoY, and moms are now the fastest growing audience on Snapchat. Meta is seeing a growth decline for the first time ever, and they’re playing catchup with younger audiences.
So what is Gen Z looking for? Authenticity. They’re moving away from the manicured Instagram ideal, and towards apps that entertain but also allow them to showcase their true passions, embrace diversity, and be their genuine selves. Less concerned about privacy, they’re flocking to apps like BeReal which prompts users to take an in-the-moment front and back camera photo at a random time every day. And while BeReal isn’t hosting paid ads (yet), it’s a trend worth keeping an eye on (you can read more about our thoughts on this new app in our BeReal Quick Take).
Finally, social search continues to rise—40% of Gen Z would rather search for a product on TikTok or Instagram than Google or Bing. And while paid search is still part of their process, social search comes in fourth for product discovery and second for brand research across all generations. We see this trend continuing to progress in 2023, so brands looking to break into crowded marketplaces would be wise to leverage social search to their advantage.
E-commerce isn’t going anywhere, and savvy brands and marketers are taking advantage of the wealth of first party data made available by retail marketing platforms.
While many consumers are going back to in-person shopping post-pandemic, e-commerce continues to grow. With 22% of shopping projected to take place online by EOY, and a growing demand for first-party data as the extinction of cookies looms, retailers are developing platforms that can benefit endemic and non-endemic brands.
For endemic brands selling products with retailers who offer on-site inventory, placing ads on the retailer’s platform not only meets consumers where and while they’re shopping, but also provides an opportunity for closed-loop reporting that ties sales data directly to media. Non-endemic brands can also benefit from that first party data trove with specific contextual targeting (e.g., a travel brand placing ads next to suitcases). Ads can be placed directly or programmatically, providing further flexibility for advertisers.
Amazon is the clear leader in this space, selling both the ad space and their extremely valuable first-party search data. But Walmart, Target, Home Depot, and Wayfair are all developing retail platforms, and Uber recently announced a new retail media arm called Journey Media. With two of three online product searches beginning on retailer sites instead of search engines, and with first party data rising in value, the importance of forging strong partnerships with retail media players will only grow in 2023.
Search spending has increased over 50% since 2019. As the leader in the space, Google recently provided a better glimpse into what the future of Search could look like: more automation, and more first party data.
Automation is best practice in Google Ads today, and the available tools continue to improve. Responsive Search, where Google’s AI helps determine your best-performing headlines and copy, has been out for a while, but is now a staple for smart marketers needing to scale campaigns effectively. Performance Max, introduced at the end of 2021, has now entirely replaced Google Smart Shopping. This powerful new AI product is a goal-based campaign type that allows advertisers to upload creative that fits Search, Display, Discover, Maps, Gmail, and YouTube, and the AI optimizes ad performance for conversions across these channels. As a whole, it’s possible that the industry is moving towards a fully-automated, keyword-less search future, but we’re not there yet. While bidding and placement may be best optimized by the AI, overall strategy is still best led by advertisers themselves.
On the data side, Google continues to move towards privacy as a default. In 2022 Google launched My Ad Center, which allows users to decide what ad categories they want to see, or even to disable personalization altogether (users can’t, however, choose to turn off ads entierly). Additionally, as marketers prepare for a cookieless future, Google is evolving their solutions to provide privacy-safe ways to preserve and collect first party data from brands, such as enhanced conversions.
While Google continues to push back the date they’ll be phasing out third party cookies (current estimate is the second half of 2024), mapping and impementing cookie-less solutions should be a priority for sooner rather than later. We’ll be taking a deeper dive into this topic in early 2023, but read on for a quick rundown on a few solutions worth tracking.
Unified ID 2.0 was launched in 2021 by The Trade Desk, and it’s an open-source solution that has continued to evolve and bring on new publisher partners in 2022. UID 2.0 replaces the need for third-party cookies, instead relying on users to supply their email to publishers which is then assigned an ID and anonymized before being provided to advertisers.
Data Clean Rooms are a secure computing environment for brands to safely store, share, and match data. Clean rooms provide a space where potentially sensitive data from different parties can be shared and anonymized so that data can be exchanged, in aggregate, while maintaining privacy for those in the data set. Google, Meta, and Amazon all use neutral clean rooms to match to advertisers’ first party data, which is then shared back with advertisers in aggregate, privatized, datasets. In the future, data clean rooms and matching capabilities will help bridge the gap left by the disappearance of cookies, but there’s a catch (or two). First, the potential of data clean rooms rests largely upon how advanced a brands data managment strategies are, and right now many marketers would agree that they’ve got some work to do on that front. And second, ultimate success in clean room matching capabilities will require collaboration from a slew of large companies sharing blinded data—much easier said than done. Still, if you haven’t begun looking into data clean rooms yet, there’s no better time to start than now.
Google’s Privacy Sandbox began global testing in 2022, and will no doubt continue development through 2023. Furthermore, we expect to see developments in the use of first party data enrichment, Identity resolution solutions, and customer data platforms. While this may sound like a bunch of buzzwords all thrown together, here’s the biggest privacy takeaway for marketers: moving into 2023, first party data is king. Investing in growing first party data sources and partnerships will serve brands well now and in the future.
The Big Takeaway
When looking ahead to next year, our advice—unlike the media landscape—is simple: continue focusing on first-party data strategies, strengthening partnerships with third-party data providers and platforms, and implementing more holistic cross-channel media approaches to unlock success in 2023. Some of this is of course easier said than done, but these guardrails are the key themes marketers should consider as they navigate the continued shifts and fragmentation in today’s media landscape. As always, if you have questions about channel trends or how to make these media developments work harder for your brand, we’d love to chat. Reach out to us at email@example.com