Advertising changes on a seemingly daily basis—it’s one of the reasons we love it! There is always something new and exciting to learn about. Part of that constant education is guiding our clients towards shifting norms, regulations, or trends that we are seeing and steering them accordingly. With that, here are a couple of things that I think are likely to happen in the advertising space over the next year. (Note: I’m not saying all of these things should happen or are good, just that they will).
1. Google Splits
The winds are blowing against large tech conglomerates, and none of those is larger than Google. While racking up billions of dollars in fines is not going to affect Alphabet’s bottom line, public opinion is rapidly moving against big tech corporations. There is no better punching bag than Google, as evidenced by the three lawsuits from everybody from the Department of Justice to the Attorney’s General of thirty five states.
I think it is likely that, in order to appease regulators, Google divests the content piece of the business (YouTube), from the advertising piece of the business (DV360, Campaign Manager, and AdSense). Why would Google care that the Trade Desk gets to sell YouTube inventory if it meant appeasing regulators? Its primary goal as a broader organization is to get you to spend as much time and money as possible within the Google ecosystem. As a move to get global regulatory bodies off their backs, I think this split happens quickly.
2. Retail Ad Networks Band Together
Every retailer in the world has dropped an ad network in the past year. Somebody will likely launch one while you are reading this article. However, just because they can, doesn’t mean they should. Building a first-class ad network is incredibly difficult, expensive, and time-consuming. I understand these companies are trying to hop onto the newest fad of monetization, but not everybody can have a wall around just their garden.
I anticipate retailers will band together, in an effort to defeat—or at least, compete with—the two behemoths that are Amazon and Wal-Mart. While Kroger would never team up with Target, imagine an ad network where you could use Kroger’s data on Best Buy, or Bed Bath and Beyond. None of these three are direct competitors, people generally use the same email address so it is possible to have a coherent unifying ID, and it allows a constant monetization of first-party data. And nobody is likely to turn that down.
3. Apple Goes All In
Apple’s goal is the same as Google’s. Spend as much time in their ecosystem as possible, across whatever device you want. I know that Apple has crafted the image as being pro-consumer privacy, but they aren’t in the business of forgoing profits. Google, Facebook, and all others’ loss is their gain. Mergers and acquisitions are all the rage these days, and with Apple’s cash on hand being basically limitless, it makes sense for them to get into the programmatic space.
Companies don’t make capital investments like the development of the SkAdNetwork, a way to measure the effectiveness of advertising without wanting to grow your ad offerings. And what would it cost to buy a top-tier DSP, a couple of billion? Apple generates $100 billion in free cash flow every year.
4. The Sky Doesn’t Fall on Advertising
The Cookiepocalypse is going to end digital advertising as we know it. I think we have all read enough think pieces or attended enough webinars over the past two years to have memorized the predicted decline of our industry. And yes, some advertisers will get left in the dust if they are unable or unwilling to adapt. And you know what, that’s ok! Innovation is a requirement in this industry, not a luxury. Instead of looking at advertising metrics, agencies and clients should judge success on business outcomes, not click-through rates.
5. Elon Musk’s Twitter Doesn’t Do Much Different
Perhaps you heard the news? Elon Musk is now the proud owner of a little social media platform called Twitter. In the end, from a marketing perspective, I don’t think much will change. Twitter, considering its user base, is a relativity minor player in the space, generating 2.3 billion in ad revenue for 2021. For comparison, in Q1 of 2022, Snapchat posted a billion in ad revenue, and that was disappointing.
Twitter itself has never been a fantastic channel, stuck in the purgatory of not being an efficient driver of conversions, while also not being cost-effective enough for awareness campaigns. It’s effective for certain brands, but it’s not a must include in most media mixes. I do think larger brands are likely to be more conscious about advertising on the platform, given the takeover of Twitter has been largely driven by a perception that free speech was being restrictive. So if they do truly become an unmoderated content hub for anything and everything, large brands will never adopt the platform.
Learning and Evolving
As I said above, constant learning is the most fun part of our job. (Don’t trust anybody who claims to know everything about advertising). I don’t know for certain that all five of these predictions come true, but it’s certainly fun to plot out the evolutions in advertising. Curious about these, or any other trends in the space? Drop us a line here – we’d love to chat!