A different take on 2023 marketing trends
It's the economy, stupid. Or the stupid economy. Take your pick.
Trend articles generally aren’t helpful. They’re set in the here and now, are full of hyperbole, and there’s little consequence for the author if they’re wildly inaccurate. After all, there will always be another shiny new object.
Onwards.
4 trends that will affect marketers in 2023
The object of this particular Dispash isn’t to show off how much I know, or to be able to look back and say “told you so!”
What I hope this will do is make people think. You might disagree with what I write. If you do, please comment or email your responses. There’s not enough healthy debate in this decade.
Trend 1: The cost of living crisis
Less of a trend, more of a reality. Unless you work in a luxury category, ignore any prediction that pushes you into new, expensive unproven places like the metaverse. If there was ever a time to double down on knowing your customer in relation to the wider market, it’s 2023.
Recessions tend to have a habit of focusing the mind of the market. Lipstick sales may go up, but in many categories customers will be asking “can I afford this?” Or “is this good value for money?”
This creates a lot of challenges for marketers, but a lot comes back to the 4Ps - product, price, place and promotion.
Does the strength of the brand allow for any kind of elasticity? Is your brand strong enough that people will still pay more for it than competitors? Will your audience willingly trade down and stay there as they realise there is little to differentiate your product versus the cheaper alternative?
And what about the category? It's easy to kid ourselves that what we sell for a living is an essential part of people's lives. Recessions have a habit of showing just how true this actually is. If your category is contracting, then how well placed are you to withstand the next few years? Does this mean you should invest in the brand or pull back altogether?
There's also one generation that will have a profound effect on marketing during what is likely to be a tough year. Millennials. I have a dislike of lumping together generations as if all people born between 1981 and 1996 look and act the same, but this will be the first financial crisis to test the leadership skills of this generation.
Older millennials would have still been in junior positions or just entering the workforce in 2008. They're now in senior leadership positions, making decisions that will affect employees, consumers and citizens.
There may be no difference in leadership and results between those who've had responsibility through an economic crisis in the past and those who are having to make tough decisions for the first time. Today’s leaders may even make better decisions. Or they may not.
Or if may - as most research into generations suggest - cut more along belief and attitudinal lines.
But whatever the challenge for each marketer - and they will all be different challenges - the overriding trend for 2023 is clear: ignore the macro-environment at your peril.
Trend 2: P,L&A (Profit, loss, and attribution)
A cousin to Trend One. Recessions impact consumers’ choices as well as those from the business. Supply chains, for example, are unlikely to suffer from shiny new object syndrome, but if the cost of goods goes up, that impacts margins, which in turn impacts price, which in turn impacts the marketing strategy.
We’re also seeing a marked retreat from the growth at all cost mindset that grew the likes of Uber, Amazon and many D2C businesses.
The margins on grocery delivery looked slim at the best of times, while companies like Cazoo in the UK that grew quickly without ever figuring a path to profitability now need to quickly show one.
The strategy of ‘jam tomorrow’ is unlikely to fly this year. Not that it’ll stop some companies believing that they are different to everything that’s gone before.
Investors, after all, want a return on their investment and investment ROI is very different from marketing ROI. Revenue does not necessarily equal profit.
But if we are talking return - and Tom Roach does an excellent job of why marketers should beware ROI and ROAS - then there is a very pressing need for marketers to know exactly what is driving their results.
That means getting more acquainted with attribution models and understanding how ‘brand’ activity impacts performance and how ‘performance’ impacts brand - although it’s never really made sense to silo them in the first place, and sensible planning usually means you should do both.
Even Facebook and Google are moving towards a wider lens and econometric models. That’s a good thing. Knowing the relationship between channels, what job they do, and how to attribute takes time.
But in 2023, it' will be time well invested, whether that’s convincing the board not to cut the marketing budget or making smarter, better bets.
Marketing has, ultimately, always come down to the P&L and making choices within the constraints of the budget.
Just because the product is good, it doesn’t mean you’ll make money (Exhibit A: Made.com). Just because you have a great advert, doesn’t mean you’ll make money. Just because you’re the category leader, doesn’t mean you’ll make money.
It might sound a bit crass and capitalistic - and may be one reason why marketers tend to invest in brand purpose - but in what’s set to be a difficult year for the global economy, just making sure that every employee still has a job by the end of it is still doing a service.
Trend 3: An assault on Google that will take a few years to shake out.
Finally, a trend that actually talks about something new and shinyish.
TikTok is surprisingly easy to underestimate. First it seemed like a fun music app. Nothing to worry about here. Then it was a bunch of Gen Zs dancing and influencing other Gen Zs. Nothing to worry about here.
And now. It’s positioned itself both as a viable, mature advertising platform with scale and as a leading cultural influence. Meta is the first, but not the second. Reddit and, to an extent, Twitter, have always been the second but have struggled to pitch themselves as the first.
But just as Google never really cracked social networks, the acquisition of the search-driven YouTube notwithstanding, none of the other social or tech giants really cracked search, although Bing still manages to be profitable for Microsoft.
So it’s somewhat surprising to see TikTok emerge as a challenger to Google, by the search giant’s own admission. Seeing my definitely-not-Gen Z partner spend a significant amount of time using TikTok as a search engine for Christmas dinner recipes was a reminder that, yes, even a seemingly unassailable category leader can be unseated.
On the other side is ChatGPT. While I don’t see it displacing Google (for reasons explained in the last Dispash), it is a threat to Alphabet’s core business model.
Technology like ChatGPT generally works best when built into something that already exists, which would suggest that Bing has the potential to gain more of a foothold than a completely new business. It also assumes that Google won’t deploy its own LLM, which has long been rumoured.
But TikTok is another challenge entirely. Alphabet seems to work best when they lead rather than copy, but YouTube Shorts is TikTok to all intents and purposes, except not quite as good or as sticky a product. Right now, TikTok is much more of a threat to Google.
This doesn’t mean that TikTok will completely usurp Google. Recipes lend themselves much better to video than, say, financial services. Searches where the user needs authority are still Google’s strength. TikTok and ChatGPT don’t provide the same level yet, and may not at all.
Expect Google to adapt though. It wouldn’t be a surprise to see greater integration between YouTube and SERPs, especially on mobile, while Google have also made attempts to index TikToks.
TikTok still requires keywords to order videos and Google has shown a pragmatism when its come to indexing other search competitors such as Pinterest. The search giant may end 2023 slightly diminished, but they’re a long way from losing their dominant position.
And all this assumes TikTok isn’t banned. If it is, the biggest beneficiary would be Google both from a video perspective (YouTube) and a search perspective.
The above is a picture to break up a very long email. I’d asked AI art tool DALL-E to give me a combination of The Scream an The Thinker as rendered by Cold War Steve. Not what I had in mind, but I quite like it.
Trend 4: TV is about to get very interesting
The death of television is a staple of more hyperbolic year end predictions since the internet first started. And yet this year feels like we may see a big shift, although it’s unlikely to be TikTok who win, as their ad dollars seem to be more about taking share fro Meta and Alphabet than broadcasters.
The broadcasting landscape is the most fragmented that it’s been in a long time. Streaming services, which were meant to be money making operations are, at best, not performing as well as predicted. At worst, they’re losing a lot of money.
There are also two main user issues which will hit the industry this year, and one industry issue.
The first user issue is the cost of living crisis (again). The sheer number of subscription services - both streaming and other media - isn’t sustainable.
Spotify and Netflix will probably fall into the essential category, Amazon Prime is an add-on to sticky delivery (although not immune from budget cuts), while Apple TV+ isn’t really a key part of the parent business, but does enough quality programming to challenge incumbents such as HBO and Showtime.
In terms of the rest, Disney+ probably has enough young children and Marvel fans to sustain their userbase, although growing the numbers is another question entirely, and YouTube will probably do even better given the rise of connected TVs.
That leaves a lot of other services, including Sky - or Foxtel here in Australia - scrabbling to sustain subscriptions. Franchises, as ever, will be important here.
Free-to-air channels that don’t charge for access have the advantage of not charging for access should be fine on the strength of their brand and the fact that they’re free, although they’re likely to be hit by the industry issue, which is ad dollars.
Adverts on Netflix don’t really grow the amount of media spend, they just take adverts from one place - most likely linear TV - and put them elsewhere.
There are finite amounts of media dollars to be spent and 2023 is shaping up to be a year when plenty of budgets will be cut.
This is probably why free-to-air TV will still probably be fine, as it reaches audiences that Netflix doesn’t at a lower CPM, and why Netflix will also probably do well enough once they get their ad inventory properly firing, as they reach audiences that may not be heavy free-to-air TV viewers.
Again, this leaves other players competing for a reduced number of ad dollars. Netflix won’t kill TV advertising. It may kill a broadcaster or two though..
Equally, TikTok may take some of TV’s advertising dollars, but given that both Facebook and Google are moving in favour of econometric models that show offline media channels such as TV or out of home are complementary to digital ad spend, the main people who will invest in TikTok over TV are probably the people who five years ago invested in Instagram over TV.
All this is played out against a backdrop of an even more fragmented landscape, where people are finding it harder than ever to know what shows are available, where (which also requires more marketing budget, which reduces margins).
The response of the industry is FAST TV: even more stations, but ones just showing a single line of programming (insert your own ITV4 joke here). I’m not quite sure that giving viewers more choice is necessarily the solution, given this is an EPG (electronic programme guide) problem rather than a content problem.
The most obvious place to solve this is hardware manufacturer partnerships, like Samsung or LG, given this is where viewers will start the programme selection journey. But Samsung isn’t a content company and ITV or Nine aren’t hardware companies, which means both need each other if they’re to step out of their comfort zone.
All of this points to a lot of movement in the industry and the landscape in 12 months time potentially looking very different to January 2023. There will be a few casualties and mergers, although none quite as disastrous as Warner Brothers and Discovery.
Find this kind of area fascinating? I recommend Doug Shapiro on “Infinite TV”.
Quick hit predictions
Twitter becomes smaller and less relevant but survives, although this does rely on Elon being able to bridge any gaps between a decline in ad revenue and a rise in other revenue sources. Or that Twitter can find any consistent, profitable revenue sources.
Somebody will take a good look at buying Roblox. My money’s on Disney.
Community-based social media continues to grow, as the age of mass social platforms starts to disappear. Although very few, if any, will actually make any money.
Assorted regulatory bodies decide to bare some teeth against influencers because it presents them with an easy win.
A lot more downsizing and a few big names being killed off as companies look to balance the books.
A lot of influencers realise they can’t make the financials of influencing work and quit. Or cynically pivot to extreme positions.
Outside of gaming, the metaverse still won’t want to be a place where ordinary people want to hang out.
Crypto will get regulated.
Interesting reads and videos to start the year
You get a trend report. Everybody gets a trend report
A useful repository of about 125+ trend reports for 2023. Some are better than others. LINK.
What if the plan for Twitter is failure?
Danah Boyd is ex-MySpace and posits an interesting theory about ‘emotionally sticky nodes’ on social networks and the actual meaning of failure for Twitter. LINK.
Why was Podcast Magazine so weird?
The idea of creating a Rolling Stone for podcasts probably isn’t a new one. The execution of one such attempt is something else entirely. LINK.
Marketing planning in turbulent times
“Godfather of effectiveness” Les Binet’s webinar on how to plan during a recession. Well worth 30 minutes of your time. LINK.
Shaping the political opinions of artificial intelligence.
A long read but a good one. The political opinions expressed by ChatGPT say more about a) the user; and b) biases within society than they do about AI. Is this dangerous? It depends, but the way AI is built isn’t dissimilar to young children: there’s a lot of incentives for the technology not to reveal any inherent problems under the hood. LINK.
On THAT McDonalds advert
I have mixed feelings. On one hand it’s a very good advert, does an excellent job around category entry points, and you can see a lot of the insight behind it. On the other hand, it’s brave - some may say foolish - to downplay or dispense with some of the most distinctive brand assets of any brand. Long term and with enough media spend and cultural awareness, the Yello song and raised eyebrows may also become entrenched as part of McDonald’s asset suite (although you can have too much of a good thing). It feels a bit of a gamble and a lot of marketing people showering it with praise on LinkedIn is not the same as reminding the 68 million people who eat Maccas each day that they’d like to eat another one in the not too distant future. Please tell me if you think I’m wrong, as I’m still mulling this one over. LINK.
Playing us out this week: Don’t let the light go out by Panic! At The Disco. Each year I put together a playlist of my favourite songs from the year, and this was at the top (the Viva Las Vengeance album is excellent: like Elton John and Kiss decided to collaborate on an album influenced by My Chemical Romance). I’m a bit of a sucker for a well-written classic rock song. There’s been some excellent, futuristic music in 2022, but the song I’ve loved the most samples At Seventeen. Go figure. You can see my whole playlist here, and I’ve put my top 10 below the video.
Don’t Let The Light Go Out - Panic! At The Disco
2am - Foals
Less Than Zero - The Weeknd
Angels and Queens - Gabriels
Selfish Soul - Sudan Archives (Natural Brown Prom Queen was also my album of 2022).
About Damn Time - Lizzo
Unholy - Sam Smith feat. Kim Petras
There’s Only One - Winston Surfshirt feat. Genesis Owusu
Lose Yourself - Kasey Chambers
Wish You Well - Baker Boy feat. Bernard Fanning
Anti-Hero - Taylor Swift
Meli (II) - Bicep
This Hell - Rina Sawayama
Love Sux - Avril Lavigne (yes, really. It’s a very good album)
Rose Pink Cadillac - Dope Lemon
Read this with interest - particularly the comment about Made.com having a good product.
My experience is they were more style over substance! I say that having bought a number of items over the years. Loved the look... but the quality was often very poor. I had to return a bedside table that was clearly badly glued, and had chips - caused not in transit, but in the factory.
My most recent purchase was the most disappointing. I needed a wine rack (well, two actually!) and my dad bought them for me. One for Xmas, one for my birthday - although I opened them both at Xmas.
Not only are they badly made (gluing, chips, dents), what's worse - and unbelieveable - is that wine bottles don't fit! Great if you only drink Riesling - long, thin bottles - but if you like a Burgundy, or a Champagne/Prosecco... no chance! The vast majority of my wine-collection of "typical" bottles simply won't fit in the holes!
Photos available!
Made have now gone bust, so we looked to claim on my Dad's credit card - unfortunately, protection only kicks in at £100.... and they cost £96.
So if anyone wants some free firewood.....
Excellent insights as always!