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| Recession Where? U.S. Ad Spend Projected To Increase in Q4 and 2024 |
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| Ad recession where? At the start of 2023, the ad tech industry was filled with fear-mongering rhetoric that an ad recession was bound to sweep the ecosystem. As the year progresses into Q4, ad spend predictions are much more optimistic. 2023 is poised to be a year of growth, and the horizon for 2024 appears even more promising. According to the latest industry insights from Madison and Wall's Brian Wieser, the U.S. ad industry is expected to witness a robust 5% increase, reaching a staggering $363 billion in revenue for 2023. However, the real headline lies in what follows. Looking ahead to 2024, excluding the realm of political advertising, the growth forecast remains at 4.3%. This growth, primarily driven by investments in digital platforms, marks a promising trajectory for the industry. Presidential Election Whirlwind: Yet, when we factor in the influence of political ads, 2024 emerges as a watershed year, with ad revenue projected to surge by 8.1%. This significant uptick is largely attributed to the impending 2024 U.S. presidential election, which is set to inject a considerable $17 billion into political advertising, representing a substantial increase from the $14 billion spent during the 2020 U.S. presidential election. In addition, the industry is witnessing a continued shift toward digital platforms as marketers increasingly invest in retail media, commerce, and various forms of digital advertising. This shift is further bolstered by advancements in artificial intelligence, revitalizing out-of-home advertising and capturing the attention of direct-to-consumer brands. However, traditional media formats such as linear TV, print publishing, and direct mail face mounting pressure, signaling a transformational phase in the advertising world. We are entering a phase of normalization with steady growth projected in the range of 4% to 5% quarterly in 2023. The industry appears poised for a dynamic year ahead with a strong focus on digital platforms and a burgeoning political ad spend. |
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| The ad tech world was obsessed with the idea of a recession by the end of 2022 and leading into Q1 of 2023. There were talks of an ad spend slowdown, low metrics, and a general sense of advertising gloom. At the end of last year, Dentsu reported that 2023 advertising would decrease by 3.8%. Peter Huijboom, Global CEO, Media, and Global Clients at Dentsu International, suggested that buyers and sellers be realistic about upcoming hard days. “We need to be realistic on how this will impact the industry, the inventory, and the returns we should expect from available budgets,” said Hujiboom. With the tides turning, as mentioned above, advertising spend will settle back into pre-pandemic trends. “It shouldn’t be surprising that we had a soft ad market on a year-on-year basis after so much frothy money evaporated,” said Wieser. ”But we’re still elevated way above where we would’ve been had it not been for the pandemic because a lot of new money came in. Inflation helped, too.” With the political ad spend whirlwind in preparation for the 2024 presidential elections, the ad tech industry is in store for some much-needed good news. Ad tech professionals are always waiting for the next ball to drop. Bask in this good news and prepare for a high-spending advertising year in 2024. |
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| Why You Need a Commerce Strategy in 2024 | ||
| Retail media is booming as more consumers shop online and retailers leverage their unique data and audiences to attract advertisers. Trade marketing budgets—and consumer shopping habits—are shifting online, growing the US retail media market to $45 billion in 2023. At the same time, in the Global Consumer Sentiment Index study conducted by Criteo, 7 in 10 consumers told us that they frequently read articles on the open web before buying important or new products. The message is clear: open-internet publishers are now a key aspect of the overall customer journey. Retail media is great for reaching consumers at the point of purchase, but buyers' shopping journeys can start anywhere, and advertisers must find and influence those users well before they make it to the retailer's site. Publishers need to look to commerce media—leveraging retail insights and commerce data to drive commerce outcomes at scale across the open web—to push consumers down the purchase funnel. To take advantage of commerce media, publishers need a commerce strategy in 2024. |
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| Publishers need to take a fresh look to identify ways to blend content and commerce. Whether they're providing product research, comparing features or pricing, or offering a digital storefront, publishers can play an essential role in the consumer journey. Preparing for Q4 is a great place to start building a publisher commerce strategy. By analyzing their audience and combining those insights with key consumer spending trends, timelines, and categories—such as those found in the Criteo Consumer Insights Dashboard—publishers can now prepare for the upcoming holiday season. To claim your share, you'll need a differentiated SSP that connects you to commerce budgets and audiences across the open web. For example, Criteo has recently launched Commerce Grid, a purpose-built commerce SSP that enables publishers to package commerce data with their supply to activate incremental commerce ad spend. |
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| Top Publishers Say No to OpenAI’s Crawler Bot |
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| The News: It's no secret that content creators are irked that OpenAI used their data for its chatbot, ChatGPT. The AI companies have been in talks with publishers to negotiate compensation, but things seem to be going slowly. According to a new report for Originality.AI, publishers are taking matters into their own hands by blocking the crawler bots launched by AI companies to gather data. OpenAI provided instructions on blocking its bot, and within two weeks, 20% of the top 1000 websites have done so. For example, The New York Times has not only blocked the bot but is also considering taking legal action against the tech startup. Background: Generative AI is a word calculator predicting what people might say based on what people have said in the past. But what was said in the past is often copyrighted material, costing content producers a lot of money in lost revenues. In July, more than 10,000 writers signed an open letter by the US Authors Guild demanding the top six AI companies obtain consent and compensate them for training models on their copyrighted work. According to the Guild, the letter "calls attention to the inherent injustice of building lucrative generative AI technologies using copyrighted works and asks AI developers to obtain consent from, credit, and fairly compensate authors." |
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| Generative AI is another example of entrepreneurs rolling out a product without considering all the ramifications. Axios likens this to Google's bot, which crawled websites for its search engines. But while some publishers see the benefit of Google's crawler that leads to traffic to their sites from searches, AI is a whole other story. "But in the AI era, publishers are more aggressively blocking crawlers because there's no upside, for now, in handing over their data to AI companies," Axios writes. ChatGPT was famously trained in "the Internet," which provides the scale needed to train large language models and is readily accessible. The problem is that AI companies fail to respect the intellectual property rights of those who created it. Until those AI companies negotiate a fair compensation model for their current (and past) use of the copyrighted material, more publishers are likely to block the AI bots that crawl their sites for training purposes. This can lead to a decline in the quality of data used to train these generative AI bots, which can have disastrous effects on the people who use them. We've already seen examples of people damaging their careers and brands tarnishing their reputations by trusting AI-generated responses. That problem can worsen if the AI companies don't agree to quickly compensate writers for the work they use to generate hefty profits for themselves. |
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| Around the Water Cooler |
| FTC Antitrust Suit Against Amazon Set for Later This Month After Meeting Fails to Resolve Impasse The Federal Trade Commission's antitrust lawsuit against Amazon is slated to proceed later this month following unsuccessful negotiations, raising concerns about the tech giant's market dominance and potential regulatory implications. (WSJ) The Great Reset: Ad Agencies Prepare for Major Transformations Ad agencies are undergoing significant changes this summer, setting the stage for a major shift in the fall. These changes include restructuring staff with layoffs, strategic hiring in areas like data and performance marketing, a return to office mandates, and the adoption of labor-saving strategies such as offshoring and AI. (Ad Age) Media Companies Show Minimal Progress in Workforce Diversity While there have been modest improvements in workforce diversity, the industry as a whole still struggles to make substantial progress in creating more inclusive workplaces, with some notable companies like BuzzFeed and The Los Angeles Times yet to release their latest diversity data amid restructuring and layoffs. (Digiday) |
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