For Advertisers, Small Stakes May Win Big
Advertising these days is like taking precious marketing dollars into a casino and playing them at tables where the rules are forever changing. Yet ad performance will be measured against historical expectations that are becoming harder to attain.
In 2023, advertisers will need to keep most of their budget invested in proven and dependable winners, then set aside a small budget for experimentation. But gamble responsibly.
While Facebook will remain a staple, some channels have gotten crowded while newcomers have emerged. Here’s how to size up the players and know what hand to play as you reevaluate the mix:
Search is Table Stakes
Paid search on well-established sites like Google and Amazon.com has the advantage of proven and consistent results, but with minimal impact on branding, which still matters for growth. Emphasize direct response advertising in 2023, with just enough branding mixed in to sustain your reputation and relevance.
Face the Retail Whales
The latest ad trends reflect a disruption in retail media across major platforms like Walmart, Target, and even Instacart. Given the size and reach of these players, advertisers might want to consider investing a small amount of their 2023 budget to see if they can rack up a few wins while retailers test their new strategies.
Take a Flier on TikTok
There’s no denying that TikTok is a major force for advertising, but it's still not performing as effectively as advertisers would like. In a recent Proxima survey of 158 marketers, 46 percent of respondents said they were dissatisfied with TikTok, yet still planning to spend on the platform. With unbeatable engagement and an enormous user base, there's potential for big returns, but with a clear call to action.
Monitor Entertainment Media
Entertainment companies like Netflix and Roblox have begun trying to monetize through ad dollars. Keep in mind that some users choosing the ad-supported alternatives may not have the discretionary spending money to spend on other brands. The same may be true for advertising with gamers, who are typically younger with less disposable income. Consider carving out a small amount of budget for these services if your audience is a match and look for deals as an early mover.
Pin Some Bets on Pinterest
Despite the recent earnings report, I'm not counting Pinterest out. New CEO Bill Ready is a former Google exec focused on repositioning it as an e-commerce platform. Pinterest has an early mover advantage with an enormous volume of engaged consumers and products already on its platform, and it has already added features that make shopping easy. However, as a newcomer to the ad space, the platform is very committed to making advertisers happy — this could result in good deals.
Use Performance Enhancers
Marketers can gain an edge from the knowledge wrought by new technology and other performance enhancers. Artificial intelligence excitement is everywhere, and advertising is no exception. Marketers who can leverage the power of AI can measurably improve targeting and return on advertising spend (ROAS), convert customers more quickly, expand reach, and scale up with confidence.
In 2023, advertisers will need to break through the ever-growing clutter and gamble responsibly with the waning dollars they have to spend. However, determining where to place those careful, calculated bets in a world where the rules and players keep changing is a tricky business. Of all the platforms now vying for ad dollars, which will win and which will lose? Only time will tell but the odds will certainly favor the bold.
Alex Song is the CEO and founder of Proxima, the data science company that leverages a proprietary database of anonymized consumer data to help brands better reach the right consumers across all major platforms.
Related story: Targeted Advertising in a Cookie-Free World