Published on Marketing Dive
How winners and losers could shake out in retail media, streaming TV and social commerce.
Is the marketing pendulum swinging back toward normalcy in 2024? Ad spending is trending that way but skewing more digital than ever. A potential recovery comes on the back of easing inflation, which could lead CMOs to loosen their purse strings following a quiet period.
Marketers will have no shortage of engagement opportunities, including the Super Bowl, the Summer Olympics and U.S. consumers’ growing appetite for more global sports like soccer and Formula 1. Experiments will run rampant with generative artificial intelligence (AI), retail media networks and cookieless identifiers, inviting some stumbles and lessons learned along the way. Streaming’s embrace of advertising could offset steep losses for TV and foster fresh innovations in CTV marketing — though it may not be enough to prevent platform consolidation.
But brands are entering the new year after a battering 2023 that saw many swept up in culture war backlash. Upcoming elections will ignite political ad spending but may lead marketers to play it safe lest they become the next Bud Light.
“Brands will find themselves in the crosshairs,” said Jay Pattisall, vice president, principal analyst at Forrester Research. “The PR industry and specifically the crisis and issues services inside PR agencies will be in high gear.”
Hovering in the background are major unanswered questions: Will the tech antitrust crackdown come to a head? How will ethical and legal battles around AI affect its growth trajectory? Is anyone actually prepared for the death of the cookie now that it’s finally in motion?
Specific is the new broad
With societal divisions running high, marketers may hit the consumer sweet spot in 2024 by honing general emotional appeals, including themes around shared humanity. Those efforts will align with a push to address a perceived overcorrection toward performance marketing in recent years, which has hamstrung the ability to make an impact.
“You had a lot of really anthemic advertising during the pandemic and then you saw brands shift toward more functional messaging,” said Anne Ryan, vice president of brand strategy at Brownstein Group. “It’s coming back toward the middle now.”
Reflecting on 2023’s breakout successes could also be instructive. Take Mattel’s pop culture takeover with “Barbie,” a movie that balanced a pointedly progressive, feminist message with crowd-pleasing comedy. The box office smash was buoyed by a dizzying array of tie-ins touching on everything from home decor to watches, showing that entertainment marketing has wide appeal.
“Specific is the new broad. With ‘Barbie,’ they really captured that,” said Rona Mercado, CMO at culture agency Cashmere. “When you are able to market to those specific groups — the nuanced groups — it trickles down and then it expands. That was a lesson for everyone.”
Agency identities in flux
Just a few days into 2024, Interpublic Group sold a pair of iconic agencies to relative newcomer Attivo Group. The surprise deal demonstrates that ad holding companies may look to further trim their portfolios following a challenging year that saw the merger of legacy brands like Wunderman Thompson and VMLY&R. Meanwhile, promising indies are getting swallowed up in a shrinking market for boutique firms.
In the fight for growth, agencies will pursue two paths forward in 2024, per analysts: Peeling back layers to better specialize in lucrative boom areas, such as retail media, or hitting the gas on expanding into a full-service offering that balances brand and performance duties.
“It’s the collision of precision and persuasion, or brand and performance marketing. They’re becoming more one and the same,” said Forrester’s Pattisall.
As agency identities become more fluid, a positioning around “digital” will disappear in an uber-connected world. Looming over the space are the risks and potential rewards posed by generative AI. The tech will drum up new business in 2024 but also result in at least one high-profile blunder, followed by a subsequent uptick in agency reviews.
“At some point, the luck is going to run out and a high-profile AI SNAFU is going to materialize. Many marketers will immediately go to their current agency suppliers and start asking a lot of questions,” said Pattisall. “More questions lead to the potential for more reviews.”
Retail media’s gold rush ends
Retail media networks will enter their own consolidation period in 2024 as marketers sift through dozens of offerings that are struggling with standardization and cut those that can’t demonstrate a distinct performance boost.
“The growth in retail media will continue, but it will continue in favor of those that can prove out that they’re driving incremental value for the brand,” said Jeffrey Bustos, vice president of measurement, addressability and data center at the Interactive Advertising Bureau. “The gold rush is over.”
CPG brands that are under pressure to prove their bets on retail media are worth it will demand a few offerings from networks in 2024. Those include programmatic marketplaces in line with what Kroger and Walmart are developing, along with greater scale into channels like offsite and in-store media. Demands for programmatic know-how will continue to benefit a burgeoning intermediary ecosystem that includes The Trade Desk, Criteo and Pubmatic.
The shock to the system that the death of the cookie will provide could also make retail media more expensive. On-site inventory is reaching a tipping point, pushing more publishers to focus on offsite formats, which might drive up the price of ID-based ad targeting overall.
“The supply hasn’t caught up enough to enable [retail media networks] to continue scaling in the open web as they’ve been scaling over the past few years, on-site primarily,” said Patrick Gut, vice president of U.S. at Adlook. “As that’s tapering off, we’re going to see not as much growth.”
Will social commerce (finally) have its moment?
As the digital takeover continues, social media is expected to be one of the fastest-growing segments in 2024. Google’s removal of third-party cookies is helping marketers reevaluate the channel’s data-driven potential, said Jimmy George, strategy director at Mischief @ No Fixed Address, including in the revitalized area of social commerce.
“I think Threads has a great opportunity to displace X.”
Evan Horowitz, Co-founder and CEO, Movers+Shakers
Retail social commerce sales in the U.S. are expected to total $82.82 billion in 2024, a 23.5% year-over-year gain, per Insider Intelligence. Much of the recent buzz in the space has focused on the U.S. launch of TikTok Shop. Already the preferred app among teens, TikTok could set a new category standard, anticipates Evan Horowitz, co-founder and CEO at Movers+Shakers.
“TikTok will pass Instagram at making that [purchasing] funnel even shorter,” said Horowitz.
The creator economy is also on the upswing, with 44% of advertisers expected to increase their investment this year. Social commerce is expected to fuel creator spending, according to Cristina Lawrence, executive vice president of consumer and content experience at Razorfish, who added that creators will become “armed with commerce sophistication.”
Horowitz expects long-form content to bounce back this year to some degree, though TikTok will continue to lead short-form’s charge. The exec also anticipates stronger interest in Threads, especially as Elon Musk’s X continues to struggle to attract brands.
“I think Threads has a great opportunity to displace X,” Horowitz said.
Disruptor brands pose a stronger threat
Brands have been challenged to stay nimble and look beyond traditional media tactics or risk falling to the wayside. Demands for agility are particularly high among younger generations, who lack conventional brand affinity but are gaining in spending power. Accordingly, disruptor brands, often lauded for their ability to move swiftly, have taken the spotlight and are expected to become an even greater threat to legacy marketers in 2024, according to Jason Mitchell, CEO of Movement Strategy.
“Disruptor brands can move more quickly and take more risks to capture attention… That will only continue.”
Jason Mitchell, CEO, Movement Strategy
“Disruptor brands can move more quickly and take more risks to capture attention, and with that, steal market share away from established brands. That will only continue,” Mitchell said in emailed comments.
The exec anticipates that legacy marketers this year will adopt more of a disruptor mentality, recently seen in viral successes from companies McDonald’s and Heinz. TikTok has been fundamental in supporting disruptors’ growth, though it has also supported the resurgence of older players like Stanley.
“TikTok has just collapsed the funnel like it’s never happened before and created this more level playing field for disruptive brands to come in and build an audience really quickly,” said Movers+Shakers’ Horowitz.
Meanwhile, newer brands like Celsius and Skims have taken a page from legacy playbooks by inking deals with sports entities like the MLS and NBA, respectively. Those types of deals will continue in 2024, according to Mitchell. More broadly, during an advertising period still showing signs of recovery from financial strain, disruptors aren’t expected to lose their risk-taking appetites, said Mischief @ No Fixed Address’ George.
“In the case of disruptors it’s about breadth, and in the case of legacy brands, it’s fewer, bigger, better is where they tend to make decisions,” said George.
Ad-supported streaming leaders emerge
Game-changing moves that have shaken up the streaming video landscape in the last few years — mega-mergers, the introduction of ad-supported tiers and battles over measurement — are set to continue in 2024. But despite continued uncertainty, major players could firm up their positions as the chickens come home to roost in CTV marketing.
Chief among those companies is Amazon, which will begin to roll out ads on Prime Video on Jan. 29 (a move that, despite being announced last fall, caught many consumers by surprise over the holidays and caused some backlash). The offering could generate nearly $5 billion in revenue for the e-commerce giant, per a Bank of America analysis, between $3 billion in video ads and an additional $1.8 billion from subscribers who pay a fee to avoid commercials.
The introduction of advertising on Amazon Prime Video — described as a “game changer” by Magna in its most recent global ad forecast — will immediately give advertisers scale and reach as the service plans to default users to the ad-supported option at launch, contrary to what Netflix and Disney+ did with their recent AVOD launches.
“It will significantly expand the scale and reach of streaming and therefore the appeal for advertisers,” said Vincent Letang, executive vice president for global market intelligence at Magna, in emailed comments.
Meanwhile, Warner Bros. Discovery — less than a year after launching its Max service — is rumored to be exploring a merger with Paramount, which maintains its own Paramount+ streamer. Such consolidation could present an appealing option for connecting price-conscious consumers with results-focused advertisers.
“Advertisers are increasingly pushing for media partners to prove outcomes on campaigns they invest in, and the data is clear: premium content drives more brand outcomes, behavioral outcomes, and business outcomes,” Upwave CEO Chris Kelly said in emailed comments. “As low-quality [made for advertising] content came to the forefront of the industry’s attention last year, there’s been a retrenchment toward premium video. So, increased scale of premium video assets will only make advertisers smile.”
A new approach to transparency
Digital is bound to remain complicated in 2024. Incremental progress on addressing transparency concerns and media fragmentation could be disrupted by Google’s cookie phaseout and the emergence of alternative ID-based targeting. Mainstay channels will continue their cleanup efforts as effectiveness becomes paramount. A report from the Association of National Advertisers (ANA) found that the average campaign runs on an average of 44,000 websites, leading to massive amounts of programmatic waste. Additionally, information discrepancies remain a top concern for advertisers while data access continues to lag.
While many aspects of media transparency are expected to evolve in 2024, eliminating waste is expected to be a top priority, according to Bill Duggan, group executive vice president at ANA.
“Another issue that I think will continue discussion in 2024 [is] made for advertising [MFA] websites,” said Duggan. “I’ve been in this industry for 40 years. I’ve been at ANA for 23. I don’t think I ever heard that term made for advertising websites until our research team uncovered that insight.”
MFAs often provide a sub-par user experience, which can hurt campaign performance. These junk sites have become increasingly prevalent, especially as marketers cast such a large net. According to Duggan, the issue is nuanced. Many platforms and publishers feel they have been unfairly labeled as MFAs, thus forcing the dialogue to continue into the new year.
A scrutinizing eye on AI
AI upended the marketing landscape in 2023 in the wake of ChatGPT mania and is sure to see further uptake in 2024. Marketers have taken advantage of consumer hype by creating campaigns centered around the technology, such as Coca-Cola’s use of generative AI to envision the year 3000 on the Las Vegas Sphere. Additionally, the tech has increasingly been integrated into administrative processes. Eighty-seven percent of marketers have used or experimented with AI tools, per industry reports.
However, the path going forward for AI is bound to be rocky. With mounting scrutiny surrounding data collection and AI misuse, the likelihood of legislative and legal action is high. Regardless, the technology poses great potential to engage consumers and deliver personalization at a scale not previously achievable — assuming it’s balanced out with a more personal touch.
“It’s the holy grail of hyper-personalization,” said Ollie East, head of go-to-market strategy and U.S. GenAI CX lead at Capgemini.
“The human creativity, the human element of it, is so valuable,” added East. “It’s an integral part of the equation.”
