In 2022, the marketing arena underwent a reshuffle: consumer behaviors deemed long-term trends during the pandemic proved not to be unbreakable, while economic contraction triggered significant turbulence in the digital sphere. Entering 2023, the industry will test whether a series of transformation initiatives have long-term viability: Can ad-supported streaming truly challenge television's dominance? Will third-party cookie alternatives and new measurement currencies gain a foothold? What real value can the metaverse deliver?

Meanwhile, the scale of large enterprises may expand further, with Microsoft and Activision Blizzard, and Kroger and Albertsons deals at the regulatory forefront. Apple's influence will continue to grow, adding pressure to already-strained platforms like Meta; retailers are expanding media networks to seize opportunities from advertising budgets shifting toward performance marketing.

The cloud of uncertainty that has hung over the marketing industry since the COVID-19 outbreak has not dissipated, but unlike the early pandemic period with surging online interactions and ample budgets, marketers are entering 2023 with tightened budgets. While competing for attention on multiple fronts like BeReal and TikTok, consumers will increasingly value simplicity and utility, further raising the difficulty of marketing.

"The picture I see for the coming year is: market fragmentation will continue, whether in retail media networks, video platforms, or ad products. But consumers will go against the grain, truly streamlining the channels and time they consume content," said Dave Kersey, chief media officer at GSD&M. "There are many opportunities to reach consumers, but attention is concentrating on fewer channels."

Consumers Embrace a 'Prudent Stance'

Consumers have had a tough time recently, first plagued by the pandemic, then facing inflation, war, and recession fears. J. Walker Smith, chief knowledge officer for brand and marketing at Kantar, noted that consumer sentiment was low in 2022, but most people also showed resilience. However, worries about future uncertainty have led many to further retrench, entering what he calls a "prudent stance."

"As we entered December, we saw consumers more worried about the direction of the coming year," Smith said. "Uncertainty remains high."

To effectively reach consumers in 2023, advertisers should further rely on proven strategies, including communications centered on "valuable value exchanges," which help reduce consumers' sense of risk during uncertain times. Smith added that brands should also "align with positive emotions," whether in messaging or in simplifying logistics.

"Take the pressure off the transaction," Smith said.

Smith believes that providing more human experiences—a demand that surged as pandemic restrictions lifted—remains crucial in 2023. Emotional appeals rather than purely functional ones will resonate more; meanwhile, as consumer expectations for representation continue, companies should uphold their core values in sustainability, diversity, and inclusion.

"I don't think just because we're in economic turbulence these will change—economic fluctuations don't change your commitment to these values," Smith said.

CMOs Need to Achieve More with Less

In 2023, CMOs may face resource constraints, but future-oriented tools promise new efficiencies. AI software like ChatGPT has gained credibility, making "ethical AI" a top priority for marketers. Hard-to-monitor "dark" channels like Discord will become more important for understanding groups like Gen Z.

In messaging, following major shifts like the Supreme Court overturning Roe v. Wade, CMOs will tread carefully on politically sensitive topics. With inflation concerns at the top of the agenda, the role's scope will further extend into sustainability and packaging.

"We see innovation issues coming from increasingly diverse sources. More often, innovation comes from CMOs trying to anticipate value shifts driven by underlying economic anxiety," said Camilo La Cruz, chief strategy officer at Sparks & Honey.

In summary, CMOs will juggle multiple roles while also dealing with well-known turnover issues, hindering long-term strategy implementation. In this context, self-protective instincts naturally arise.

"Difficult financial environments do create silos, where people in different functions may work at cross-purposes," said Ewan McIntyre, vice president analyst and research lead for Gartner's marketing practice.

Recent Gartner research confirms that marketers who claim to be collaborative often underperform compared to those who work independently. But McIntyre notes this doesn't necessarily mean working independently is more valuable.

"I don't think this means CMOs should seek to work more independently. I think it means they need to learn to collaborate better," McIntyre said.

Retail Media: Power Growth and Consolidation

In a period of shrinking budgets, retail media will thrive in 2023 as marketers seek more direct paths from ad exposure to sales conversion. Global retail media spending is forecast to grow 10.1% this year to $122 billion, making it the fastest-growing media channel. Following Marriott, the concept will expand to more categories and extend to formats like connected TV (CTV).

But the growing pains of retail media seen last year will also intensify. Some marketers, after overemphasizing performance and partially losing control, will course-correct.

"The expectation for 2023 is a better balance between brand and performance," said GSD&M's Kersey.

A more prudent approach to retail media may mean power consolidates among a few players. Physical retail giants already dominate the space, and the potential Kroger-Albertsons merger further highlights the importance of scaled data. Some retailers are also bringing operations in-house, challenging the partner ecosystem.

"Advertisers have difficulty managing all these partners," said Lori O'Neal, global head of retail and consumer goods strategy at LiveRamp. "They end up choosing the top ten or top five partners."

Despite the scale of the Kroger-Albertsons deal—and potential regulatory challenges—other retailers may seek to enhance their digital infrastructure and talent through areas like ad tech.

"Valuation expectations between buyers and sellers may become more realistic in 2023," said Sean McCaffrey, president and CEO of GSTV. "I expect a new wave of dealmaking in 2023."

Experts say data-driven partnerships, like Walmart's recent e-commerce collaboration with Roku, may also increase as marketers realize that pooling resources yields richer insights.

Rougher Waters Test Agency Resilience

In 2022, agencies outperformed expectations, with traditional ad holding groups raising guidance despite inflationary headwinds. But a broader slowdown may finally materialize in 2023.

Layoffs that the industry had previously avoided are increasing, especially in creative fields. As deal appetite weakens and clients change hands, acquisitions made earlier in the pandemic need to prove their value.

"After years of aggressive M&A, holding companies now need to prove long-term ROI," said Greg Paull, co-founder and principal at R3, in an email.

Investments in areas like performance media and data also require fresh talent. Some researchers expect leadership to shift to more tech-savvy managers. Mass layoffs at big tech platforms may enrich agencies' talent pools.

"As many agencies continue their digital transformation, the relevant skills are aligned with what we're doing," Kersey said.

However, attracting the right talent will become difficult as agency culture weakens. The influence of individual agency brands will decline, while the power of networks—including emerging mid-sized players like The Brandtech Group and Plus Company—will receive more attention.

"Advertising is becoming more transactional. That's the nature of media and our data- and technology-driven culture," Paull said. "When creative styles can be generated by AI, your agency's name matters less than the results you can produce through data within your partner network."

Metaverse: No Longer a Guessing Game

Since 2021, the metaverse has attracted marketers, spawning numerous mostly one-off campaigns. Enthusiasm around the concept remains, but this year may bring more clarity on privacy and security, especially for younger consumers, and better define what the term "metaverse" truly means.

"2023 redefines the metaverse from a video game to a communication strategy," said Eric Pulier, CEO of Vatom.

To date, many metaverse marketing campaigns have taken place on platforms like Roblox and Fortnite. This perception will persist, prompting platforms to strengthen monetization through advertising, said Matt Moorut, director analyst in Gartner's marketing practice. Brands seeking continued maximum value from these strategies will need to focus on differentiation.

"Initially, if you set up a new skin or arena in a game, that was newsworthy in itself. Now, you need to build a full campaign promotion strategy that includes KPIs to find value in it," Moorut said in an email.

Non-fungible tokens (NFTs) were once seen as the darling of the metaverse. But cryptocurrency controversies, including the collapse of FTX, have tarnished the image of digital collectibles. Nevertheless, Vatom's Pulier predicts NFTs will still have a place in 2023, especially in loyalty programs—similar to what Starbucks is already exploring.

Pulier added that augmented reality will also thrive in 2023, with giants like Snapchat leading the way. Campaigns in this space are expected to go beyond fun filters to richer shared experiences.

"You'll see people interacting with billboards in different ways, extracting information, storing it in wallets, and bringing it all the way back to retail for attribution," Pulier said.

Social Strategy Diversifies: Pursuing Trust and Data

Consumers have shown willingness to go beyond the social media status quo and try emerging apps, paving the way for platforms like TikTok and BeReal. In 2023, advertisers will bet more on user curiosity, choosing to test a broader range of platforms, while established players like Meta and Snap face declines.

"We see people across many different verticals truly thinking outside the box," said Amy Rumpler, senior vice president of paid search and social at Basis Technologies.

Rumpler believes that in 2023, the short-form video format popularized by TikTok will remain the darling of the social space, but not at the expense of long-form video. She expects short-form video to be used to lock in interest, then drive to longer-form content.

Rumpler added that the end of third-party cookies could lead to increased social ad spending, but also spark more discussion about targeting and measurement challenges in the channel. During this critical period, Twitter will take a backseat due to troubles from Elon Musk's dramatic acquisition.

Cookie Deprecation: Déjà Vu

Since Google first announced—and then delayed—the deprecation of third-party cookies, advertisers have been seeking ways to protect their data investments. Experts predict that, from a macro perspective, 2023 will be no different from 2022, but new solutions will gradually become clearer.

"I think third-party cookies will basically replay 2022," said John Puterbaugh, executive director of advanced media and innovation at Quad. "All the action will revolve around first-party cookies."

Attribution and measurement will be in focus in 2023, especially as third-party cookies may become obsolete before being fully phased out. According to Mathieu Roche, co-founder and CEO of ID5, 40% of global traffic is already non-addressable by cookies.

New solutions to measurement and attribution issues may proliferate. For example, The Trade Desk launched Galileo in early January, aiming to provide accurate cross-channel data activation. Data clean rooms are also expected to become more prevalent after Amazon and Disney began enhancing their capabilities last year.

"The bottom line is that the industry needs to move away from cookies, test and adopt next-generation identity solutions that don't rely on cookies, offering improved addressability and data protection mechanisms," Roche said in an email.

Sports Marketing Hits a 'Tipping Point'

As consumers increasingly watch games on alternative platforms, sports marketing will continue to fragment. Following "Thursday Night Football" moving to Amazon Prime, NFL Sunday Ticket will migrate to YouTube TV for the 2023 season.

In the digital wave, the advertiser landscape may shift. While consumers can expect to see typical CPG and alcohol ads, more "side industries," such as gambling and even cannabis, may appear in sports marketing.

Diageo, the spirits giant, will air its first Super Bowl ad this year. Additionally, sports betting platforms like DraftKings and FanDuel are vying for market share. FanDuel will even take live bets during the third-quarter ad break of Super Bowl LVII, with stakes up to $10 million.

"We're at a tipping point now where the money behind gambling, spirits, and cannabis is so large that leagues, teams, and athletes can't not continue to profit from it," said Evan Scott Schwartz, partner and head of content at creative consultancy Kingsland.

Experts expect the popularity of other sports, like soccer, to rise in the U.S. Thirty-one percent of U.S. consumers identify as soccer fans, an all-time high. Esports is also expected to attract sponsors, though it will face some difficulties as finances tighten.

"I predict that due to lack of revenue and distress, i.e., their inability to raise necessary capital, we will continue to see further consolidation of esports teams," said Chris Mann, senior vice president of REV/XP, rEvolution's gaming and esports group, in an email.

The FIFA Women's World Cup is upcoming, and WNBA ratings remain strong. Some experts predict that, given growth opportunities, women's sports may offer better marketing investment value than men's sports.

"As more brands examine equity in their spending and see the power of women's sports and the communities around them, investment in women's sports media, sponsorships, and athletes will continue to grow," said Lou Kovacs, president of marketing at Octagon North America, in an email.

Streaming Fatigue Hits CTV

In 2023, CTV will remain a vital part of the digital ecosystem, with new ad-supported offerings from Disney+ and Netflix drawing attention. In such a fragmented space, cross-channel performance measurement will be more important for brands—provided their messages can cut through the noise to reach fatigued consumers.

"You see this ad avoidance behavior," said Eric Schmitt, research director at Gartner. "We all skip ads, block ads, but now the situation is... truly attractive consumer segments can avoid most ads."

As streaming platforms compete for eyeballs, consumers will be more cautious about spending. Services like HBO Max have begun experimenting with consolidation and cutting content costs, a trend that may continue. Warner Bros. Discovery is expected to launch a service combining HBO Max and Discovery Plus, a move that will disrupt the space.

Additionally, as platforms seek new revenue and attract budget-conscious users, ad-supported tiers will receive more attention. As consumers tighten spending, growth in ad-supported video-on-demand and free ad-supported streaming TV services also seems likely.

Correction: John Puterbaugh is the executive director of advanced media and innovation at Quad. This article has been updated to accurately reflect his title; a previous version was incorrect.