Where is the digital advertising industry headed? That is the question that should currently be top of mind for all brands. Digital advertising has become a critical part of brands’ strategies, but with the industry constantly changing, it can be hard for companies to keep up with new offerings and successful ways to approach the landscape. Although consumer behavior continues to rapidly shift, digital advertising remains a key driver of new business, customer loyalty and revenue for B2C organizations – making it a must-have for brands. When it comes to digital advertising, there are many challenges companies face but the opportunities and gains remain endless. By digging into the mind and behaviors of the consumer, brands can make smarter decisions on where to allocate their ad spend and how to strategically plan the campaigns shaping their business.

Marketing Technology News: MarTech Interview with Anish Mehta, Founder at Animeta

Ad Spend: Where are we now?

Social media has seen a 40% increase in time spent on these platforms in the last few years, and much of the ad dollars spent by brands are on the digital side – especially on these sites. Social media has increased in users by 4.2%  year over year thanks to the rise in popularity of short-form video content from platforms like TikTok and YouTube, career opportunities, and even more time at home because of the COVID-19 pandemic. With this increase in active social media users and booming popularity of video and gaming apps, we’re not likely to see a change in that trend anytime soon.

We are, however, constantly seeing a shift in which social media platforms receive the most spend – which often points to where the consumers are and, therefore, where brands see the most return on ad spend (ROAS). This year, 48% of brands say they received the best ROAS from YouTube and 35% from Instagram – a change from the 48% last year who saw the best ROAS from Instagram. Due to this, we will likely see a significant increase in spend on these platforms in 2023 with 79% of brands planning to increase ad spend on YouTube, and 75% on Instagram. This shifting of digital advertising spend is a perfect example of brands analyzing consumer behavior and then adapting to it.

However, there is value for brands to remember that while most consumers are on social media, that’s not where all consumers are. When brands are thinking of where to implement their ad campaigns, they need to keep their entire target market in mind. For example, 65% of brands are still contributing ad spend to Connected TV. When it comes to social media, we are seeing that around 37% of brands spend anywhere from 26%-49% of their marketing budgets on social media advertising and 9% of brands spend roughly 50%.

The many challenges to digital advertising

In previous years, developing engaging creatives and optimizing campaigns across various digital platforms has proven to be difficult for advertisers thanks to these changing consumer behaviors. More than ever, brands are adjusting their digital advertising strategies to keep up, taking additional steps necessary to develop those eye-catching creatives that will resonate best with their audiences. For these tasks, many brands are turning to new processes and tools to assist, including automation technology.

Automation is the hot topic across almost all industries. Companies are looking for ways to make their processes more efficient by eliminating many daunting, time-consuming tasks in an effort to optimize work. Digital ad creation is a great example of where automation is stepping in to streamline tasks and we are already seeing 89% of teams utilizing this technology for much of the process. By doing this, companies can free up time for those working on the internal creative teams, giving them the opportunity to shift their focus to high-quality content and the overall success of the campaigns.

In addition to the technical challenges of digital advertising, brands also face external roadblocks as well. Macroeconomic factors including inflation and supply chain disruptions are current issues that are out of our hands but can influence consumer spending and therefore the effectiveness of ad campaigns. Always on the sidelines are issues such as increased competition, maximizing efficiency and return on investment, production goals and growing number of channels. However, many of these can also be solved by automated technology. By implementing the right tools, businesses can cut back on costs and time spent while still increasing production and productivity.

Marketing Technology News: Look Beyond Apps To The Keyboard For User Engagement

Looking ahead

In 2023, digital advertising teams are planning to increase the usage of different visual assets including motion creatives, such as animations, static photos and even innovative creatives like 3D and AR. By utilizing the right technology, brands will be able to effectively deploy these assets in an efficient manner – but the most important step in this is streamlining collaboration, achieving alignment and removing manual processes. Most businesses are in luck – 77% of teams feel that their digital advertising and creative teams are already effectively collaborating in all stages of the marketing process, making operations smoother. But that doesn’t mean there isn’t room for improvement when it comes to preparing for and/or confronting other challenges that need addressing to ensure brands offer consumers a seamless digital advertising journey.

As we continue to move through 2023, we can expect to see the continued investment in digital advertising from companies to keep their brand elevated amongst current and prospective consumers. The rise of the use of automation technology within the digital advertising space can further help these businesses reach their target audiences and, in turn, their goals.