Perspective - The most transformative year of the early 2000s

By John McNerney | 6 December 2023
John McNerney.

The AdNews end of year Perspectives, looking back at 2023 and forward to next year.

I believe we’ll look back at 2023 as the most transformative year of the early 2000s, for a number of reasons.

Firstly it has been a year of business transformation across the industry with many of the major businesses, including Yahoo, reshaping their teams and offerings as the market becomes more sophisticated. This has unfortunately led to a reduction in team sizes in some places, but what we’re already seeing is a cohort of companies which are much more robust and able to find growth in some tougher economic times.

It’s also been a revelatory year around media investment. In Australia it’s the year where linear TV’s audience dominance was really questioned for the first time which has seen marketers changing strategies and moving their investment to other channels as well. It’s been something of a frog in a boiling pan - the audience shifts are nothing new, but it’s really just being felt as economic pressures mean marketers are questioning efficiency across their media.

By no means is TV dead or even endangered, but the idea of Total TV, understanding audiences across linear and digital channels, is now front and centre. You just have to look at Foxtel’s recent announcement to use ACR data for audience measurement via VideoAmp, to understand the potential for a multi-currency ecosystem. Yahoo has also been solving this problem for clients with great success through our partnership with Samba TV.

With the addition of FAST channels to the media mix and more subscription streaming services launching ad-funded tiers it is clear TotalTV means a lot to marketers. As more streaming giants get interested in things like live sports streaming rights it is clear there are and will be more disruption to come and local TV networks will need to find their place in this new world order.

I’ve deliberately left AI until last. While it’s had an outsized share of attention this year its impact isn’t necessarily being felt acutely yet. Instead it’s been something which has focused minds and created a lot of tests into how it may be able to streamline processes and improve media buys.

It’s going to impact every business in some way, whether its operational efficiencies, upskilling the workforce and changing the types of roles we have today to be far more commercial, creative and strategic focused in nature.

If 2023 was voluntarily transformational for many businesses, 2024 is going to see a lot of change forced upon the industry from a number of sources.

Global tech businesses are going to bring one set of challenges - we will finally see cookies deprecated from Google in 2024, and I suspect Meta at least will say goodbye to its News Bargaining Code-enforced deals and sever ties with news for good.

That is going to be a huge challenge for publishers still reliant on referrals from their platforms.

However, the single biggest impact for everyone will be the Privacy Act update in Australia which will likely be put in place and enforceable by the end of 2024. Whatever its final shape, it is clear the government is laying down the new ground rules for how businesses conduct themselves with people’s data, and rightly so.

Every marketing organisation needs to make changes to their current approach. But, I believe it will have the biggest impact on the less scrupulous players in the market, whilst anyone who doesn’t have a direct consumer relationship will also find it harder to compete on a performance level without updating their addressability strategy for audiences.

It’s now a matter of when, not if this happens, so there is no time to lose. There are a lot of resources being created by industry bodies like ADMA and the IAB, and again there are partners (like Yahoo) which are already compliant because of global regulations in other markets.

Ultimately I believe it will be a good thing, we need to earn back consumer trust and having more guardrails in place and everyone being more conscious of what we are doing with customer data is going to be a net positive in that regard.

Finally, there’s the environmental impact of what we do which is coming into sharp focus but will be placed centre stage in 2024. We’re seeing the rise of a few industry initiatives, which Yahoo is behind, which are drawing much-needed attention to this problem. Australia is front and centre of the climate change problems - once we’ve sweltered through January I suspect more questions will be asked of partners by marketers to prove their credentials, and rightly so.

The market has been short for quite some time, but it is definitely getting shorter for a few reasons, not least budget uncertainties. What we’re seeing is shorter planning cycles with last minute budget releases happening from clients.

It means our teams have to be more reactive than ever before, however we’ve also factored this short-termism into our model and are not waiting for things to happen. Instead we’re proactively educating agency partners on the opportunities out there and how more can be done with smaller budgets by thinking differently, so it’s really creating opportunities and proving out the
promise of programmatic advertising across every channel from display to out of home and CTV.

The more we get out there and educate people, the better the results we see for advertisers.

However, this needs to be a collective industry-wide effort by partners for marketers if we are going to make the most of the opportunities available to us and have a positive impact on advertising best practice.

John McNerney is Managing Director of Yahoo AUSEA

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