In recent years, a lot has changed in digital marketing, prompting advertisers to adapt to new challenges and opportunities. Recent data based on the VIA & Deloitte report on advertising expenditures, there are several notable trends that could influence business strategies in 2023 and beyond. In this blog, we will delve into the key findings.

Digital spending appears to be stagnating.

In the past year, there has been minimal growth in digital spending. Despite significant inflation, this is notable, suggesting a decrease in effectiveness. What is striking is that we expect a growth of 14% for next year. Are advertisers compensating for this? From Draft's perspective, we anticipate that 14% is substantial and that it will be less. The advertising market is under pressure.

Increase in spending on Search Engine Advertising (SEA) 

Despite ongoing inflation, we only see a small increase of 3% in spending on Search Engine Advertising (SEA). This indicates that companies continue to invest in this channel and that it still yields sufficient returns. However, the ROI will gradually decrease due to inflation, and parties will need to further develop their SEA strategy. This can be done in various ways, such as improving tracking so that Google can better optimize values or implementing first-party data. It is likely that some companies will adjust their strategies or look for alternative channels if this trend continues.

Decline in spending on television advertising and the shift towards a 'total video' strategy

It is interesting to note the decline in spending on television advertising, indicating a shift in marketers' priorities. Companies seem to be responding to the decreasing reach and the mismatch between content and their target audiences. This has led to a greater focus on a 'total video' strategy, which encompasses online video and social media. It is expected that ad-supported video-on-demand (AVOD) models, such as those of Netflix and Amazon Prime, will play a significant role once they achieve substantial reach. At present, we are limited by relatively little good and high-quality inventory, making it extremely difficult to achieve an equivalent effect as on television.

The growth of local spending lags behind.

While there was an expectation that local advertisers would gain a larger market share due to the declining performance of international channels like Meta and Google, this shift has not been observed. Platforms like TikTok appear to compensate for this by offering an appealing alternative for both users and advertisers. 

Rise of Digital Out-of-Home (DOOH) and Retail Media

Digital Out-of-Home (DOOH) appears to be achieving the greatest growth, primarily driven by Retail Media. This indicates a strong market shift towards these forms of advertising, increasing consumer engagement at physical locations. Retail Media, exemplified by initiatives like Ahold's AdRetail and Amazon's offerings, demonstrates how online providers can leverage their data to create more impactful advertising. When applied effectively, Retail Media will truly come into its own. Currently, the focus is primarily on achieving reach rather than performance.

The decline of Programmatic Advertising

Programmatic Advertising appears to be losing importance. This can partly be attributed to alternative advertising tools offered by platforms such as DPG and Albert Heijn. Additionally, growing concerns about the environmental impact of the Programmatic Ecosystem contribute to this trend. Furthermore, the phasing out of third-party cookies seems to limit the added value of RTB. It is no longer always essential to use a DSP for banner purchases.

Another 'positive' insight is the visible shift from the Open Market to Private Marketplaces and Preferred and Marketplaces. Advertisers seem to place more importance on quality. Additionally, not all inventory is available for purchase anymore. This includes specific placements at DPG Media or inventory at FDMG.

Challenges with "Cookieless" inventory

A notable aspect of this research is the mention that only 44% of the inventory is still purchased using cookies. This seems inaccurate considering that larger DSPs, Ad Managers, and SSPs often still rely on cookies technically. A prime example of this is market leader DV360. From Draft's perspective, there is an earlier expectation that the market is insufficiently aware of the functioning of cookies in the programmatic ecosystem. Currently, only a few parties are capable of trading non-consent inventory.

Summary

Despite only a minimal increase in digital spending over the past year, significant changes are underway. This is also influenced by shifts in other media types, such as TV. At Draft, we strive to assist advertisers as effectively as possible through these changes and aim to stay ahead of the market. Interested in a non-committal introduction? Please contact us via this link.