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Top 9 Digital Advertising Industry Trends of 2023

By incivus

With Spotify Wrapped making the rounds, we decided to chime in but with a twist! 2023 was the year of innovation in advertising, with many interesting and unique developments not just creativity but with how we view advertisements. We at incivus dived deep into what happened in the advertising and marketing world in 2023. Let’s take a look.

1. Immersive Ads took the Spotlight

In 2023, a trend of more immersive and interactive ads, particularly Computer-Generated Imagery (CGI) advertising, began. Jacquemus was the first brand to successfully implement this trend, gaining millions of views for their advert featuring their bags cruising the streets of Paris in April 2023. The video currently has 48 million views, and they pioneered the use of CGI in advertising. Other brands followed suit, such as Maybelline’s Sky-High Mascara promotions, which showcased a subway with eyelashes gripping the station’s tunnel with the mascara’s wand. The video currently has 76 million views! Many other brands, including Victoria Beckham, Loreal, and the Barbie movie franchise, also participated in the trend. This trend became popular amongst the Retail, Entertainment, and FMCG industries.

Source: Marksmen Daily

The CGI trend was successful because it gave marketers a cost-effective way to create ads and generate significant engagement and brand awareness. It also allowed viewers to see different visuals of the product, including immersive experiences, all within the realm of short-form video content, which is what audiences prefer nowadays.

2. Short-form Video Ads

With attention spans plummeting (hello, 2.5 seconds on TikTok!), crafting video ads that hook and hold viewers is a major challenge for marketers. The rise of YouTube Shorts and Instagram Reels has intensified the competition, giving brands just a fleeting 60 seconds (or less) to make their mark.

This has triggered a surge in short-form video ad spending, fueled by the fact that 90% of marketers invested in short-form video in 2023, making it the highest of any trend, according to HubSpot.

Currently, 73% of consumers are craving bite-sized video content, making it the preferred format for engaging ads. But the million-dollar question remains: what’s the perfect video length? The answer isn’t one-size-fits-all, with platform preferences ranging from YouTube’s 8.8 seconds to TikTok’s lightning-fast 2.5 seconds.

Source: Burger King’s X account featuring Barbie x Burger King collaboration.

3. The Year of Collaborations.

Brand collaborations were reinvented in 2023. Although an older practice, we saw a rise in sales after the effective collaborations that brought in Barbie. There were over 100 brand collaborations with Barbie, and the most popular ones were with Zara, Crocs, GAP, and NYX Cosmetics. It was an absolute explosion of partnerships, one after another. Whether the partnerships seemed odd or not, needless to say, it was a hit. Mattel saw a sales growth of 16% in 2023 due to these partnerships.

4. Influencer Marketing is at an all-time rise.

Influencer marketing has been rising over the years. In 2022 86% of marketers had used influencer marketing in their strategies and now over 1 in 4 marketers currently leverage influencer marketing as it offers the 2nd highest ROI of any trend. In 2023, it is still seeming to grow with 17% of marketers looking to invest in influencers and many even use influencers as an essential part of their marketing plan.

Source: Statista

The influencer industry has experienced a significant boost due to the rise of User Generated Content (UGC). This type of content provides viewers with a more authentic experience, which is why customers now prefer to purchase products based on the recommendations of influencers instead of celebrities. While this trend is expected to continue in 2024, the emergence of almost-celebrity influencers has shifted the focus to micro-influencers. Brands are increasingly valuing authentic content and are finding better engagement when partnering with smaller influencers. Moreover, brands that prioritize authenticity are preferred by Gen-Z because they base their purchasing decisions on it.

5. Rise in Amazon Ads.

2023 can be called the disruptive year for Amazon ad services. Amazon’s ad services saw a rise of 26% bringing in $12B in just the 3rd quarter, as opposed to $9.5B in the 3rd quarter of 2022. This happened due to the partnership between Amazon’s ad services with publishers and brands selling on Amazon.

In 2023, the Sponsored Products ad on top of the search results has picked up. It was reported in a study that 35% of customers click on the first product ad they see on top, and hence brands prioritized this format over the others. The new upcoming formats also include the Featured Brand format. Amazon makes for a better place to advertise as it is comparatively more affordable than other channels like Meta and Google and produces better ROI The average cost-per-click is only $0.71, and the average conversion rate is 9.55% making it an ideal strategy and the most cost-effective option when compared to Facebook and Google ads.

6. The Powerhouse: AI.

In 2023, AI adoption reached new heights. The growth and evolution of AI have been remarkable. AI has been highly sought after for content production, advertising, personalized shopping experiences, chatbots, ad creative testing, and more. The possibilities are truly endless considering the rapid pace at which AI is developing. Let’s break it down

i. Programmatic advertising

Programmatic advertising refers to the use of AI and automated technology for buying and selling digital advertising space. The rise of the post-cookie era has led to an increase in programmatic advertising, as it helps marketers track the right kind of audience.

Programmatic Advertising Platforms like Adobe Advertising Cloud, Basis Technology, Albert, MediaMath, StackAdapt and GumGum are revolutionizing the ad tech space with the use of AI. Some popular brands using these tools include Hersheys, KFC, Crabtree & Evelyn, Air Asia and many more.

ii. Ad Production

The amount of spectacular work produced by AI with the human touch this year was incredible. With the surge of brands trying to chime into the trend, we saw Nike, Coca-Cola, Virgin Voyages, and Oreo all create some form of ad content using tools like Midjourney and Dall-e. These garnered millions upon millions of views and got people talking about the endless possibilities with AI. With an expected compound annual growth rate of 37.7%, it’s clear that the AI market is here to stay.

iii. Smart psychology

Brands are utilizing AI to predict how the audience will react to their advertisements. Marketers are employing “smart psychology,” or neuromarketing, to comprehend how brands and their ads are being perceived by the audience. We at Incivus test ad creatives based on their Creative Effectiveness, Recall, Attention, Music, and Emotions. This enables marketers to use these fundamental data points to create their advertisements. Not to brag, but we help marketers craft effective ads!

7. Social Commerce is at an all-time high!

Did you know that interactive video content can increase engagement rates by up to 300%? It’s true! Advertisers have started leveraging Shoppable Ads and Live Shopping in their social media marketing strategies to further drive sales. In 2022 alone there were 100 million shoppers who were purchasing from social media apps directly and sales amounting to $958 billion. Currently the social e-commerce sales stand at $1253 billion.

In September 2023, TikTok introduced a new feature called Live Shopping which enables viewers to shop directly from an influencer or brand during a live session, making the process even simpler for brands to interact and sell to their customers.

As for ROI, Instagram stood out amongst the rest when it comes to social commerce in 2023.

The social commerce trend is most popular amongst Retail, Electronics and FMCG brands, to name a few Revolve clothing, Apple, Sephora, Tarte and Fenty Beauty.

Source: Influencer Marketing Hub
(Source: HubSpot Social Media Trends 2023 report)

8. Digital Audio Advertising

Audio advertisements were a popular choice a few years ago, especially when radio stations were more prevalent. However, their popularity decreased as social media and video platforms gained more traction. Nevertheless, digital audio ads are made a comeback in 2023 due to the surging interest in podcasts. A growing number of individuals favor the hands-free consumption of content, and IAB data supports this trend, stating that podcasting is growing twice as fast as any other digital channel. Advertisers are taking note of this trend, particularly since audio ads have a 24% higher recall rate than traditional display ads, according to Nielsen Media Lab.

Audio ad spend grew by $8.89B in 2023 when compared to $7.57B in 2022 according to Statista.

Music streaming apps like Apple, Spotify and Amazon music have seen a rise in the revenue of their advertising services and podcast marketing.

Source: Statista

With many industries opting for digital audio as a part of their marketing strategies, Hyundai’s audio ad campaign with Audacy stood out, it showed a +7.4 lift in purchase intent, in 2023 according to their report “State of Audio: Fuel the Funnel”.

Industry wise, the Retail sector is showing the most boost in sales after investing in audio ads, in 2023.

Source: Audacy
Source: The Social Intelligence Lab

9. Social Listening is still popular.

Social listening is the analysis of social media content about the product or brand. The most popular platforms this applies to are LinkedIn, Instagram, TikTok, Facebook and X. In 2023, 51% of marketers used social listening for data analysis, 36% of marketers used it to analyze social media trends and 25% of marketers were focused on brand monitoring and tracking. In 2023, it still continues to be trending with 39% of respondents spending more than $100K compared to 33% in 2022, according to the report by The Social Intelligence Lab.

Some Social Listening tools are Sprinklr, Brandwatch, Meltwater and Talkwalker. Social Listening tools are popularly used by CPG, Media and Entertainment and Travel and Hospitality industries.

There you have it! That’s the advertising industry trends in 2023. We cannot wait to see the innovation and creativity to come in 2024, if you’d like to be assisted in making those memorable ad campaigns, don’t forget to get in touch with us here.

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