Maximizing and Measuring Performance Will Dominate Advertising in 2023
Given the tough market environment, advertisers will be looking to remain competitive. The first few months of 2023 seem to confirm the need to rethink their media mix in order to boost their impact and performance.
The advertising industry seems to be trending in the same direction this year of having to “do more with less”. Rationalizing at every level, each line of budget will therefore have to prove its impact and contribution to revenue as much as possible, and ideally in the most direct way possible.
The lower funnel is not always a risk-free option
As expected, brands are now focusing on lower-funnel performance, i.e. conversions, leads, online sales, which generate the greatest impact and most significant revenue drivers. However, they are aware that focusing solely on the bottom of the funnel could be too restrictive. This is why, beyond simple conversions, new criteria such as “lifetime value” (the total value of a customer over time) or attribution measurement (a score given to each interaction with a prospect, according to his real contribution to conversion) could alter the performance of some historical actors in the market.
The mid-funnel, an under-exploited opportunity
Brands also seem to want to strengthen the mid-funnel, i.e. qualified traffic. This stage of the funnel, which is essential prior to conversion, is still too often misunderstood by advertisers, and thus offers a lot of room for improvement. Beyond engagement and attention, metrics such as cost per qualified visit, per new visitor, per time spent, per interaction, and per shopping cart are now scrutinized by brands. Together, they make up an accurate “score” which constitutes the benchmark to assess the performance and impact of all levers.
Greater emphasis on branding
These initiatives have been accompanied by a certain reappraisal of the upper funnel. Branding, within this ROI maximization logic, is the one that unsurprisingly contributes the least to revenue. While branding remained strong in 2022 despite the crisis, there has been a clear shift since the end of last year toward more tangible results. Nevertheless, it is still a major pillar of advertisers’ marketing mix, especially video, which remains a popular format for users and the younger generation.
In contrast, brand safety, transparency, and respect for users will be given particular attention, as part of a necessary ethical approach. The measurement of its effectiveness will also be strengthened, by taking into account new, more varied signals and criteria such as attention or impact. Visibility alone is no longer a sufficient KPI for advertisers.
Measuring in a cookieless world
A major challenge for brands at any stage of the funnel is the relevance of metrics in a cookieless world. Ever since the consent reform, advertisers can no longer track the behavior of a large proportion of their internet users and, as a consequence, brands are increasingly shunning away from Google Analytics. We are therefore witnessing the arrival of new models of measurement, particularly statistical, whose use remains low and their effectiveness has yet to be proven.
Lastly, advertisers are logically continuing to rationalize their channels and favor those with the best performance, impact, and ease of use. This rationalization is also accompanied by a reassessment of social networks in relation to their brand safety, their excessive influence, and over-dependence on them.
Chat GPT or the illusion of novelty
Other trends are also emerging, such as the highly publicized Chat GPT. This said, the artificial intelligence technology on which it is based is already used by many platforms – notably to boost and personalize creative messages – and does not really bring anything new. In the long run, however, it could well represent a revolution that will shake up our entire industry, and change it profoundly. At the moment, all that matters for advertisers is the very short term, and the need to “do more with less”… as quickly as possible!