As we ring in each new year, there's one thing you can count on: the web fills up with 'Top 2023 Ad Tech Trends' blog posts and other similar articles. But does the internet need one more of those posts? We think not.
So, this year, we decided to put a different spin on the tradition and talk about our 2022 ad tech expectations versus the reality today in 2023. While our unique position in the industry gives us lots of insights and access to knowledge, we get it wrong from time to time.
Since we didn't have a crystal ball to consult (if you do, let us know where you picked that up!), we turned to our best resources, MGID VPs and executives, to get their take on the topic.
Let's see what they had to say.
#1: The ugly truth about ChatGPT
Expectation: Creating unique content will become more difficult for publishers
Reality: ChatGPT is capable of generating infinite amounts of unique content
Creating a constant stream of unique and high-quality content that attracts and engages audiences is challenging and time-consuming.
Here is where ChatGPT can come to the rescue! This AI language model can easily and instantly offer an extensive list of topics along with the accompanying article content, giving publishers another source for developing the unique content they need.
#2: Finding products online be like
Expectation: Google will remain the de facto search platform, and no other company can compete with it
Reality: ChatGPT is changing the game and will continue to influence the way we search for information
For decades, Google was synonymous with the term 'search,' so much so that it became a default verb in our vocabulary. The company has an impressive 85% market share. However, a Google search result now yields the top ten results sandwiched between six ads, making it more of an ad platform and less like a search engine. Since ad sales are Google's primary revenue source, prioritizing ads is a wise business decision but may not be the best user experience.
Then, ChatGPT emerged, and one million people created accounts in the first week — a number that will grow exponentially this year. ChatGPT performs like an advanced version of Google, delivering complete and (usually) more accurate answers to search queries without the distraction of pay-to-play ads. What makes ChatGPT a game-changer is that not only can it find answers, but also its output can complete tasks for people. It can write code, songs, text summaries and much more.
We think this year, instead of someone saying, "Let me Google that," they will say, "Let me ask ChatGPT."
#3: TikTok evolving into...
Expectation: TikTok will become the leading video social media platform
Reality: TikTok has evolved into Gen-Z’s go-to search engine
TikTok's meteoric rise has been nothing short of amazing. The app has transitioned from a social media platform to one that gives Google a run for its money — and that comes straight out of the mouth of a Google executive.
Early adopters and forward-thinking brands have already figured out that Gen-Z and younger users see TikTok not as just an entertainment app but as a search engine. More and more brands are now tweaking their strategies and content to serve the needs of these users and ensure their content shows up in front of actively engaged, ready-to-buy audiences.
#4: Google has seen better times
Expectation: The Google & Facebook duopoly won’t be challenged
Reality: Amazon & Apple have become an unbeatable duopoly
Google has enjoyed their reign as one of the top channels in any media mix, hoovering up ad spend, but a dramatic shift happened in 2022.
Amazon became a product search engine. Over 60% of US consumers start their product search on Amazon, while 49% use a search engine like Google. We believe this change is because user reviews heavily impact consumer purchase decisions, and Amazon puts them front and center.
The fate of Google’s ad business now hangs in the balance as the US government just filed its fifth antitrust lawsuit against the tech giant. We can’t wait to see how this plays out!
On the side note, Apple's App Tracking Transparency feature delivered a heavy blow to Facebook, causing it to lose $10 billion in ad revenue in 2022. Apple's ad sales began paying off immediately, and the company is investing heavily in its ad technology.
Amazon and Apple are the new undisputed champions of the advertising ecosystem today. Facebook has fallen out of favor with advertisers and consumers alike.
#5: Open Web still rules the world
Expectation: Walled gardens will destroy the open web
Reality: The open web may beat walled gardens at the end of the day
With years of data collection under its belt, many in the ad industry expected walled gardens like Google, Amazon and social media platforms to offer better monetization opportunities than the open web. However, once Google announced it would phase out third-party cookies (now postponed again to 2024), open web publishers wasted no time preparing for a cookie-less world.
Open web publishers have already begun embracing new technology that enables them to capture and harness the power of first-party data, which is far more accurate than the generic data that walled gardens have. Although publishers may have smaller data sets, their users are niche and highly engaged, making them potentially more valuable to advertisers and brands.
#6: The biggest problem with VR & AR
Expectation: Advertisers will leverage virtual reality and augmented reality to create immersive and interactive ad experiences
Reality: VR and AR create engaging and memorable ad experiences but are still cost-prohibitive for most brands
Consumers were delighted and mesmerized in years past when big-name brands like Oreo and Samsung used AR and VR to create innovative campaigns. The reactions generated high interest in these technologies, which we expected to accelerate development and, in turn, make the tech more accessible, but that didn't happen.
While mega brands can afford to play in these virtual spaces, the cost to create those campaigns remains far out of reach for the average company. With belts tightening, brands have to reevaluate their media budgets, and campaigns powered by expensive technology have been the first to be deprioritized.
#7: Metaverse turned into a meme
Expectation: The Metaverse will change the way we work, live and communicate
Reality: So far, it hasn’t amounted to much more than a meme
The metaverse dominated headlines in 2022. Tech enthusiasts (okay, really, just the companies that made insane financial investments into developing the metaverse) couldn't stop talking about how it would revolutionize our world.
While those tech companies wanted us to believe that everyone was amped up for the metaverse, virtually no one understands it. One study found that although 38% of the American public claims to be familiar with the metaverse, only 16% could correctly define it, and it probably took them all of 2022 to gain that understanding!
The metaverse is still years — if not a decade — away from becoming a reality. Its most notable achievement so far is the massive amount of memes it has generated — and we’re here for every one of them!
What else is in store for 2023?
Expectations are about potential and possibilities, hope and imagination. Some expectations materialize, some don't. That's okay, though, because it means there's room for new ideas to spring up and become a reality.
We're excited about the expectations that have come to life and those realities that are better than what we anticipated. However, we're most grateful that all projections show that the ad tech industry will continue to grow and progress by leaps and bounds despite economic uncertainty.
What else is in store for 2023? Check out MGID's New Year's resolutions and ad tech predictions for this year. We can't wait to see which ones become a reality!