As I see it, there were three major themes that defined 2023 – and it’s the same three themes that will continue to shape 2024; Privacy; Delivering ROI through tech and the unavoidable explosion of AI. Since joining GroupM 12 months ago to launch Acceleration in Australia, I’ve been working closely with our agencies and clients to connect data and technology, media performance and digital transformation to business results, and these three things have been constant themes.
They might not be the glitz and glamour end of the market donning Black Tie and heading to awards shows, but it’s increasingly where business impact is made.
Privacy kept the ad industry on its toes
Fun fact: GDPR is as old as my 5-year-old. That feels like a lifetime, but the Australian industry still seemed to be caught a little off-guard by the various developments in the Privacy Act that have been tabled, debated and in some cases parked this year.
An overhaul of Privacy has been a long time coming and the industry’s focus on improving privacy for consumers is a much needed and overdue effort. The reality for most advertisers is that there’s still a lot more to be done to prepare for cookie and device-ID depreciation. Globally, we’re seeing 7 in 10 advertisers being moderately or highly exposed to these tracking changes.
Thankfully, the major ad platforms (think Google and Meta) are providing solid platforms and infrastructure that’s enabling clients to adopt these privacy preserving technologies such as Conversion API’s. Anecdotally, we’re seeing signal observability improvements of up to 30%, as well as double digit ROAS improvements in a lot of cases. The algorithms need data.
We’re working closely with Google on a first of its kind partnership to accelerate testing and better understand alternative approaches that marketing effectiveness in a post cookie world. As we move into 2024, we are edging closer to satisfying the needs and requirements for both brands and consumers in the next era of privacy where the fundamental rights of all users of digital services are protected, and we create a level playing field that fosters innovation, growth, and competitiveness.
Martech investment was scrutinised like never before
Marketing budgets are under obvious pressure and marketing technology certainly hasn’t been immune to this. Globally, Gartner state that marketing budgets still haven’t returned to pre-pandemic levels and the sector has been sluggish.
We’re also coming off the back of a decade of significant investment in marketing technology. Gartner famously benchmarked in 2017 that more than a quarter of marketing budgets were going to Martech, which was more than investments in media or agency services.
The flip side to this is that in the wake of the investment, Martech utilisation has been trending down for the past few years, now at 33% according to the Gartner 2023 State of Marketing budgets report. And if we’re honest, utilisation has probably been low since the inception of Martech back in 2013. We’re just facing up to this reality as businesses navigate through such a period of financial stress. 75% of marketers now feel under pressure to cut their Martech spending and a continued shift towards Martech value extraction is a good thing.
So why is that, and how will it change in the next era of Martech? A lack of skills in AU, often cumbersome internal processes, heightened privacy and cyber risk, under-investment in people/process to operationalise and continually improve, are all credible reasons. This stuff is complex and technology only solves for a small part of it. We need to constantly remind ourselves that it’s not a set and forget – these implementations are living, breathing things that need to be nurtured.
We’re seeing increased demand from marketers in the space of media use case development and CDP strategy as well as tech architecture. Businesses have procured the tech, deployed parts of it, but need further guidance on the role it plays in media, technical feasibility and value extraction. For those considering Martech investment, we’re finding more are asking what they can do with their existing tech or without the price tag of an enterprise grade Martech SaaS platform. With +90% of websites running free tools like Google Analytics and Google Tag Manager, there’s a strong foundation for many clients to build on without a 6 or 7 figure SaaS price tag. As always, it should be use cases first, technology second.
A blustery explosion of AI developments
If you didn’t notice, the world went crazy for GenAI in 2023 – from the AI-generated beer from one of my favourite breweries Modus, the deep fakes of Pope Francis in a puffer jacket, to this person getting fired by a client for using AI and fears that AI would replace marketers altogether. Its uses and applications are widespread from novelty stunts and dupes, time-saving admin to the truly transformational. And so far we’ve only scratched the surface. McKinsey has staked a claim that GenAI will add US$4.4 trillion to the global economy annually. That’s a big number.
I don’t see the hype subsiding anytime soon, and there’s likely to be more frenzy and bluster before it stabilises, normalises and delivers on its transformative promises.
Whilst the world focused on ChatGPT, there are widespread ways data-driven, cloud-enabled AI capabilities and tools will reshape the entire marketing landscape from content creation, audience segmentation and beyond. For marketers specifically, we’ve spent a large part of 2023 consolidating 100+ AI use cases into a maturity model that brands can use to focus their efforts. We’ve looked at six vectors where AI and cloud can play a transformative role, including Marketing Analytics, Creative AI, Bidding and Audience Intelligence. Our hope is that businesses can use this to understand their current maturity level and build a pragmatic roadmap for AI adoption that drives results.
AI will hopefully change the world for the better (or at least the marketing department) but let’s not lose sight of Amara’s Law – over-estimating the short-term impact, but underestimating the long-term impact. We should keep a pragmatic mindset and pursue the early wins with high impact at the same time as investing in R&D for the long term.
For the year ahead, I’m almost as excited as my five-year-old was on the first day of school! Full of optimism about the opportunities and solutions emerging at the intersection of data technology and media as we shape the next era of media.
Tom Braybrook, Managing Director, GroupM’s Data & Tech consultancy Acceleration
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