ROAS, realism, and retailer data: our media trends for 2023

There’s a certain amount of optimism needed to try and make predictions right now. If the events of the past few years have taught us anything, it’s that – while we might get some things right – something completely new and unexpected will probably still catch us all unawares. That doesn’t mean that it’s not fun to try, however.

With that latter thought in mind, we asked Julie Jeancolas – dunnhumby’s Global Head of Media & Customer Engagement Solutions – to give us her views on what 2023’s big trends might be from a media and advertising perspective. Let’s see what she had to say.

1. Recessionary times demand sure fire solutions

Life can be difficult for marketers in a downturn. With the already tough job of convincing consumers to choose your own products over a rival’s, economic volatility adds an extra layer of complexity in that you also have to convince people to spend out full stop.

For consumer packaged goods (CPG) companies, where competition is fierce, margins slim, and private brand products are waiting in the wings to take your place, that task can be harder still. Discretionary spend tends to be one of the first casualties of a recession, with shoppers typically opting to cut back on anything they perceive to be non-essential.

It's in this kind of environment that the focus turns to results – and more specifically, sales. It’s much easier to make the case for a bigger marketing budget when you can demonstrate how your proposals will improve the bottom line, after all. What that means is that, as the commercial impact of ad campaigns comes under increasing scrutiny, retail media is likely to see continued gains in 2023 and beyond.

Of the many benefits that retail media provides, one of the most important (from my perspective) is to be able to track the direct connection between what people see and what they buy. Few media channels offer that kind of tangibility in terms of measurement, and that appeal will only increase as brands find themselves needing a sure fire answer to a recession’s impact on sales.

2. Retail media measurement goes beyond ROAS

Having touted retail media’s value as a sales-driving, lower funnel activity, it’s important to acknowledge that it can also be used incredibly effectively across the rest of the marketing funnel, too. From awareness and consideration, all the way through to loyalty, retail media gives brands the opportunity to engage with customers in any number of objective-driven ways.

Naturally, that also means that advertisers need to be able to measure the impact of those activities effectively, no matter what they are. With retail media now growing in popularity across the marketing spectrum – shopper, brand, ecommerce, and marketing teams all now engaging with it – so too will demand for deeper and more insightful measurement capabilities that go beyond just sales.

Key metrics here will include the ability to understand the impact of retail media on customer behaviours higher up the funnel, as well as a more nuanced appreciation of the long term impact of those activities – whether a customer is new or existing, whether they become a repeat buyer, and their lifetime value, for example.

3. No reprieve for cookies makes audience targeting the new priority

Can it really happen again? For Google, third time really does seem to be the charm, with the deprecation of third-party cookies in Chrome set to finally go ahead come 2024. Having been delayed out of both 2022 and 2023, that deadline now appears to be finally locked in, giving advertisers just over a year to find alternative sources of insight for segmentation, targeting, and measurement purposes.

While many CPGs have started collecting their own data in preparation for that date – via the likes of sweepstakes and digital promotions – a huge amount of work is still required to process and analyse that data in an effective (and, vitally, legally compliant) way.

This is one of the main reasons behind the growing popularity of data clean rooms – privacy-focused analytics software that can be used to understand which campaigns drove sales without exposing customer data. Not only do clean rooms enable brands to use that knowledge in order to refine their targeting and segmentation capabilities, they do so in a way that’s in adherence with current consumer privacy laws as well.

The pending disappearance of cookies also helps to explain the growing importance of first-party retailer – it’s accuracy, granularity, and legislation-compliant nature making it a perfect (and in many cases much better­) substitute for what is being taken away. For CPG marketers, who’ll undoubtedly want to maintain and improve their customer understanding and audience targeting capabilities come 2024, retailer data is likely to end up being their preferred replacement.

In advance of that, and to ensure that the leap into a post-cookies world is a seamless one, expect 2023 to be a year in which many.

4. Social channels suffers as the advertiser exodus continues

From the metaverse to Musk, it’s been a strange year for two of the world’s social media giants. Facebook parent company Meta has seen its advertising revenues tumble by around $10bn this year, with many brands choosing to desert the platform altogether according to a report by the Wall Street Journal[1]. Twitter, meanwhile, is believed to have lost 50% of its top 100 advertisers since Elon Musk’s acquisition[2].

That trend is unlikely to be reversed during 2023. Meta’s shift in focus towards virtual worlds looks set to continue despite shareholder protestations, and Twitter’s recent spate of users posing as “verified” entities is likely to have caused serious concern for any marketer with even a passing interest in brand safety. Spend will continue to shift away from those platforms as a result, which will only benefit brand safe environments offered by retail media...

5. Personalisation is the new “price of admission” for marketing

For consumers, personalisation is now a basic requirement. McKinsey research shows that 71% expect personalised interactions with the companies they buy from, with more than three-quarters becoming frustrated when they don’t get them[3]. Naturally, that goes much deeper than just having a contact centre or live chat operator being able to pull up your details, too – it’s a truly pervasive expectation.

For marketers, that’s both an opportunity and a threat. On the plus side, the data, science, and media products needed to deliver on that expectation are abundantly available. The counterpoint to that, of course, is that consumer tolerance for those who don’t personalise their communications is becoming increasingly low. For marketers, personalisation is now table-stakes – and consumers are about to call.

6. Value-centric content takes centre stage

I started with a note about the economy, so let’s end there too. If there’s one critical rule to media creative, it’s that you need to capture the mood of your intended audience. As the cost of living crisis continues, the likelihood is that many brands will try to reflect that reality in their campaign creative.

While there will still be a place for glossy, glitzy, and aspirational messaging, I’m expecting to see a return to down-to-earth, value-centric content that serves to align advertisers behind the majority of their customers’ current economic realities. Messaging around finding joy in the little things, and getting the most out of everything we buy, will come to the fore during the year ahead.

There’s more at stake here than simple goodwill, too. As noted above, recessionary times can be dangerous for brands; with customers more easily swayed by cheaper products, positioning is key. Used well, media can help to show that you’re there for your customers through the good times and the bad, something that could end up having a critical impact on long term loyalty.

[1] Facebook's $10 Billion Advertising Exodus – The Wall Street Journal, 7 March 2022
[2] Twitter has lost 50 of its top 100 advertisers since Elon Musk took over, report says – NPR, 25 November 2022
[3] The value of getting personalization right—or wrong—is multiplying – McKinsey & Company, 12 November 2021