Canadian Ad Insider

What are the media predictions for 2023?

When you hear the word ‘media’ - what or who really impressed you in 2022?

• Looking back at 2022, the dominance of both TikTok and Snapchat stood out to us. According to Statista, Snapchat (with a brand value growth rate of 184%) was the fastest growing brand in North America, while TikTok (with a brand value growth rate of 215%) was the fastest growing brand In Asia. At year-end 2021, we did not predict this exponential 2022 growth but both platforms took steps to reinvigorate and keep relevant. Snapchat introduced many new features such as Snapchat for Web, Snapchat+, Mid-roll ads in Snap Star stories, and new Shopping Lenses – all features that either influenced targets to spend more time using this app or persuaded them down the consumer funnel (to some capacity). Similarly, TikTok (which many initially thought was simply a platform to post dance trends/ challenges at the start of the year), made waves as it introduced its own set of new features and capabilities. TikTok Pulse (an ad revenue sharing ad-on that will allow brands to put ads on TikTok that are in the top 4% of performers) and TikTok Now (its own version of BeReal) are a few developments that will boost the platforms popularity among both users and advertisers. With this said, we think short form video (and platforms that promote this) are going to continue to grow/ dominate in 2023.
•  We also urge our clients to embrace distinct creative strategies and practices for each platform. Creative should be customized by platform and more than ever one size does not fit all.

What disappointed you?

• Hands down the Netflix AVOD entry into Canada – high buy-in, absurdly high CPM’s, lack of flexibility, and lack of intel/options on audience targeting
• Both advertisers and consumers were expecting a more attractive offer

What does eCommerce look like in 2023?

• The growth of eCommerce in Canada is ahead by approximately one year in Canada vs where predicted. As we know growth was fast-tracked by the Covid epidemic but in recent months we have seen some slowing down and leveling of eCommerce in some sectors.
• Pandemic adjustment to increased engagement with safe and convenient shopping options via technology is not going away.  We believe consumers are looking for more savvy, smooth and convenient eCommerce options and integrated relevant messaging that engages them in their eCommerce activities
• That being said growth will stay steady, and not dramatic, over the next few years and increased attention will be needed to the in-store experiences, as people return to in store shopping (and they are)
  • Need to be truly omni channel and available at every touchpoint
  • Out of stocks and empty shelves will force consumer to buy your competitor
  • Manage ad $ to avoid low inventory periods because the lead might go to a competitor at shelf and probably a value brand.

What obstacle (s) will keep marketers up at night in 2023?

• Consumers Costs:
  • The combination of high inflation, increased interest rates and the subsequent threat of recession is keeping consumers from spending as freely as in past years. Many consumers also feel retailers have increased prices ‘because they can’ – shipping costs, loss of staff and low inventory/supply chain issues during the pandemic resulted in price increases, and now many consumers feel retailers are continuing to raise prices since this became the norm from 2020-2022 and it therefore acceptable.
• Continued Reduced Consumption:
  • Beyond inflation we will continue to see some categories remain impacted by low demand and this is something marketers are going to have to plan for and work closely with their media/creative partners to manage presence and messaging to optimize their business i.e. A need to fight for a better share of a smaller wallet. Knowing this, there is an opportunity for some brands to spend smartly, and gain share if their competitors cut back dramatically or go dark thereby setting up for stronger and more dramatic recovery.
  • Tourism and Entertainment continue to be a high-profile categories that have not, nor will bounce back to pre-Covid levels in the immediate future.
• Social Issues:
  • “Pandem-flation” (term just coined by IPSOS):
    Confluence of pandemic concerns/adjustments that are carrying-over, with aroused environmental concerns, whether they be geo-political, economic or climate
  • Consumers are increasingly aware of environmental and societal issues.  Consumers feel they can play their part against these problems by overlooking retailers that contribute to these issues.
    Complex environmental conditions expected to result in continued volatility overall.
  • Transformation and evolution remain the order of the day – in fact, the new normal and marketers will need to stay on top of rising trends and be nimble in their response – a marketers new normal.
    Pandemic residual impacts on daily habits that are continuing: re-connection to the home environment, Canadians re-discovering joys of screen time with fewer social interactions (Facetiming and zooming have forever altered the rules of social engagement), online shopping and reinvigorated interest in outdoor activities.

Short-form video has been very popular in 2022 - TikTok, Instagram Reels, YouTube Shorts, BeReal - What will happen in 2023? How is it beneficial for brands?

• See first point

Podcasting - any predictions?

• Podcasts have continued to increase in popularity over the past few years and Podcast streaming is on the rise overall.
• Major broadcasters (and large podcast vendors are both investing in podcast production and enabling their targeting to become more sophisticated (with contextual and behavioural targeting). This will continue to allow advertisers to home in on their audience, much like other digital tactics.  As content continues to improve, smaller, independently produced podcasts will drop off.
• However, we still see scale issues and podcasting remains for our clients one aspect of a larger audio strategy. Like radio, attribution can be harder to pinpoint than other media.
• Podcast advertising currently provides a great niche opportunity to hyper target consumers in an engaged, clutter free, exclusive environment.
• Research has indicated that the recall and impact of podcast ads may be higher than in other audio channels. We will continue to test and learn in this space.
•  We predict continued growth here, especially for B2B targets.

Metaverse - what does this look like in 2023? [will it look different in 2023] [Is it ready for brands] [Is it ready for consumers]-

• Yawn

Streaming video services - any predictions?

• Current SVOD vendors with premium and self-produced content are moving to a hybrid SVOD/AVOD model to generate more revenue.  We see acquisitions/amalgamations occurring in this part of the sector – consumers are limiting their SVOD subscriptions, and multiple AVOD options will result in the streaming universe becoming too fragmented.
• Note: Amazon Prime and Crave have begun inserting trailers in between shows, so it certainly feels like a gear-up to follow suit with Netflix
• Broadcasters will eventually offer FAST channels that mirror or are like their linear assets.  The current FAST channels in Canada offer either limited or non-premium content (e.g., CBC Explore News & Pluto TV) – given the content constraints, we do not see the current channels generating a large amount of revenue. The lack of revenue will encourage broadcasters to re-package a wide breadth of premium content, with the intent to garner higher CPMs from advertisers.
• Meanwhile the AVOD market has been growing with new entries, Netflix, of course and, Pluto and NBCU pushing their YouTube offering.
  • We desperately need improved measurement!!! Duplication, reach/frequency, audience stratification
  • Audiences will continue to grow but still less than int he US
  • CPMs will remain high until demand lessens and audiences increase
  • Netflix CPM is too exorbitant for many advertisers, and too few advertisers buying in may create annoyingly high ad frequency
  • FAST is making noise with the recent Pluto launch, but how many users will join and remain active is our question?
  • Just because you join a new service because it is free, doesn’t mean you continue usage if the content isn’t’ there
  • Much of Pluto content is old so is there an audience?
  • We think Canada will come to a tipping point in 2023 or 2024 where consumers will get tired of paying so much for all of the services and looking for bundling options
    • Already happening in the US
    • Looking for ways to get ahead of this for our brands
    • We cannot see Netflix being acquired because we think they believe the best bet is to maintain maximum control over both the ecosystem  the offering and the content.
    • Look for bundling of streaming services to encourage additional subscriptions or to prevent cancellations.
  • Where will most of the workforce be working this time next year
    • Expect continued hybrid model over the next year with increased focus on a more permanent, if partial return, to in- office work.
    • There will be an increase to more days in the office vs days at home.
    • In person training and employee development sessions will increase.
    • Retail staff training will see growth as stores staff up for greater traffic.
  • Recession - any predictions? If so, its impact on media spending
    • Currently experiencing historic inflation rates and rising cost pressures affecting all Canadians. Whether there will be a high-impact recession is not clear; but it is ‘looming’ in consumer consciousness and likely to impact how, where and when consumers shop.
    • Key recession indicators remain somewhat contradictory with unemployment figures still low with wage increases still happening although for many not enough to cover inflation. Some trends:
      • widening gap of disposable income – economic impact of pandemic not equal across strata and current trends likely to exacerbate this
      • deteriorating disposable income, particularly among middle and low-income consumers, affecting needs and daily choices.
      • Definition or classification of ‘affordable luxury’ is changing
    • Twitter - any predictions?
      • Brand safety around social media, especially Twitter, will continue to be a top concern in 2023
      • Very few brands figured out how to use Twitter to their benefit before so we can’t see many new brands moving $ there in the short term.
      • We wonder if the recession plus negative press will make pulling dollars from social platforms an even easier decision than it was in ‘21 and ‘22
    • Radio trends
      • Traditional AM/FM listening is still the top choice for in-car listening and will see continued post Covid bounce back growth with more people going back to work.
      • Note that radio will not return to pre-Covid levels but will still have strong daily and weekly reach numbers