By: Matt Wasserlauf, Co-Founder and CEO
If the past three years have taught advertisers anything, it’s to expect the unexpected. From COVID-19 to a looming recession, instead of asking “why?” they should ask “what’s next?”
There has never been a more exciting time for digital advertising than right now. With the market projected to reach nearly $947B by 2027, there is tremendous potential and opportunity for advertisers. So what do they need to know to make the most of their business decisions for 2023? Here are five predictions:
(1) Amazon buys Paramount. As Amazon has worked the past few years to get into content through licensing deals and original programming, they could acquire Paramount for their amazing content. Additionally, consolidation across major media and technology will continue to accelerate in 2023. The catalyst for this particular combination will be around NFL rights. Moving NFL programming to streaming platforms will destroy significant value across broadcast TV: broadcast’s final ratings pillar. Amazon, Netflix, Google and Apple will examine these acquisition opportunities as the recession grips the economy and drives consolidation.
(2) Linear TV will be the hardest medium hit by budget cuts. In 2023, marketers will pull back spending on Linear Broadcast TV for two main reasons: (a) Broadcast ratings are already down, and the major networks are lacking in new hit shows and premium content; (b) Linear TV is far less accountable than online media or social media. All these digital alternatives provide attribution and a direct correlation to sales and results, which is what’s needed most in a recession.
(3) CTV will be the fastest growing advertising platform. This is well underway. Major players such as Netflix, Apple and Amazon Prime are already accelerating development schedules for premium content, grabbing large shares of CTV ad spending. In the year ahead, major publishers like Paramount, Comcast, Disney and Discovery will invest more in their streaming platforms and drive viewership to their CTV apps.
(4) Government antitrust regulation will not be enacted to break up dominant media players, but scrutiny will percolate on Capitol Hill. No government antitrust regulation will be coming down the line for dominant industry players such as Google and Amazon in the year ahead. With so much economic reliance riding on these powerful technology companies, the administration will have little appetite to break them up. This will not be good news for smaller tech companies and start-ups. However, it will weed out companies that are poorly run and underfunded.
(5) The recession will impact ad spending, but it will be short-lived. All early signs point to a “soft-landing” when it comes to a recession, with the Federal Reserve indicating that they will ease interest rate hikes in the near term. This signals great news for the economy, but the softness across this area will impact ad spending throughout 2023. As in any recession, advertising tends to be the first budget cut, and while this will hold true again in the coming year, it will be short-lived and should rebound by the second half of the year.