Infrastructure & Automation: Predictions for 2023
In the context of economic uncertainty, staff shortages and the need to leverage signals beyond the third-party cookie, it’s no surprise that advertisers are now turning to artificial intelligence (AI) and other automated solutions to improve their ad infrastructure for leanness and agility to reuse. . Research released this year by ExchangeWire, in partnership with Scibids, revealed that 42% of UK programmatic spend used algorithmic decision-making or AI, driven by operational efficiency, convenience and revenue gains.
With these factors only set to gain more prominence as marketing budgets tighten, ExchangeWire spoke to a range of industry experts for their predictions on how marketing infrastructure and automation will evolve over the course of 2023.
Automation: cutting costs, increasing output, and boosting the bottom line
It is a known fact that modern consumers will only engage with brands that resonate with them on a personal level. As the cost of living continues to soar, buyer behavior will evolve and the need for hyper-personalization strategies will increase. Brands need to look for new ways to improve engagement and increase customer acquisition without breaking the bank.
To stay competitive, brands must respond to customers in a personalized way—an impossible task without automation technology. Automation improves efficiency by running pre-programmed campaigns across an ever-increasing number of channels, reduces error rates, increases performance optimization in real-time, and allows marketers to evaluate data-driven insights into buyer behavior for a first-rate customer experience .
At a time when attracting and retaining customers is more important than ever, automation technology is a key way to cut costs, increase output and improve results.
Jay Kulkarni, CEO, Theorem Inc.
The growth of emotion and generative AI
In August, Gartner announced useful insights about advertising trends it expects in the future, including around AI and contextual advertising.
First, Gartner emphasizes emotion AI, which it interprets as understanding users’ emotions, although this concept is questionable from a privacy perspective. Instead, real potential in emotion AI comes from shifting focus to context, measuring sentiment in the moment.
The second trend is generative AI, such as DALL-E, which uses AI to generate creative images based on command prompts. An example of a commercial application involves allowing advertisers to understand the different models belonging to a particular car brand – but also which of those models compete with other brands’ car models, all achieved through machine learning.
Whether for media planning or creative, the applications of and options around AI are growing. 2023 will be the time we take our experimentation and understanding in this area to the next level.
Heather Lloyd, Head of Product Marketing, Nano Interactive
Dexterity and agility
Subject to the impact of the impending recession, along with geopolitical strife and energy crises, IT spending is likely to remain static for 2023 and not increase until 2025. But rather than spell a slowdown in technological innovation, what we will see next year is the convergence of existing technologies to become “mainstream”. Robotics, VR, AI, IoT and 5G, for example, will all be more widely integrated, delivering richer experiences for consumers and faster, more agile solutions for businesses at a lower cost.
What will this mean for the advertising industry? Well, we can expect AI to become commonplace for campaign optimization as well as design, with some brands taking it in-house. Others will use third-party, AI-led platforms. As a result, traditional, creative and network agencies will struggle to achieve historic levels of profit growth as digital campaign delivery becomes more commoditized and automated by these more agile solutions.
Ian Liddicoat, Chief Technology Officer and Head of Data Science, Adludio
Increase efficiency and drive lasting engagement
There is no doubt about the enormous progress that AI solutions have made in the past year and we only expect it to continue to evolve until 2023. We will see more businesses shift focus to maximizing their carefully allocated resources through automated solutions that increase efficiency and drive lasting power. engagement with their target audience.
With the introduction of AI technologies, such as ChatGPT, set to revolutionize how consumers interact with computers and search for information online, businesses will need to keep up with changes to ensure they remain visible. At a time when businesses advertising online are also facing the impact of Google search inflation, with search representing 40% of UK advertising spend, adopting mechanisms that ensure better returns is essential for businesses to survive the competition.
Within the next months, we expect that more businesses will invest time to understand the benefits of incorporating AI solutions into their systems and thus reap the benefits.
Gustav Westman, Founder and CEO, BrightBid
Unification of the ad stack through adaptive AI
With inflation looming in 2023, a likely recession and the ongoing fragmentation of the media landscape, we can expect many marketers to examine their technology stacks to examine where efficiency can be improved. One consequence of this will be an even greater use of artificial intelligence solutions.
Although recognized as an area of strategic importance for some time, adaptive AI, in particular, will play a larger role in the industry in 2023. Able to use privacy-friendly user data to significantly improve media reach and productivity , while maintaining efficiency at scale, brands will increasingly want to leverage these solutions next year.
At the same time, with AI-led insights also augmenting the bidding functions for many DSPs using first-party and measurement data over the past year, we can expect more DSPs to recognize the need for enabling adaptive AI. help unify ad stacks.
Rémi Lemonnier, co-founder, Scibids
Publisher-led SPO and custom demand stacks
With the increasing adoption of server-to-server bidding and a greater focus on supply path optimization, automating preferred supply routes will become increasingly important as we enter 2023. While much of the supply path optimization has so far been done by DSPs and SSPs, publishers have an opportunity to grow revenue by carefully choosing which demand partners they include server-side and client-side to ensure the most efficient path to their inventory. Taking things a step further, the most advanced publishers will have the ability to adjust their demand stack in each individual auction using data science to maximize the value of each user.
Kurt Donnell, CEO, Freestar
Addressing complexity and systemic inefficiencies
2023 will not be business as usual. Anticipation of recession is already impacting 2023 marketing budgets, pushing CMOs into a defensive posture as they head into the new year. When budgets are challenged, most CMOs often focus on cutting short-term variable costs, such as media spend. These short-term cost savings are often offset by more systemic inefficiencies under long-term fixed costs, such as operational challenges in the media buying process. This is why advertisers equipped with solid infrastructure and automation such as ad resource management (ARM) will be better positioned to execute cost optimization instead of cost cutting.
2023 will also see the continuation of the incredibly complex fragmentation of data-driven media, from existing walled gardens to new entrants like Netflix and Apple, data-driven TV, audio, TikTok and DOOH. Managing this complexity will also require centralized infrastructure and automation for advertisers looking to thrive in 2023.
Aurelien Blaha, Global Marketing Director, MINT