Here's What's Coming in 2024, According to New Engen Leaders

"The impact that companies like Temu and Shein are having on the US digital ads market can not be overstated. Their massive scale and ability to spend behind a remarkably diverse set of products and categories has a gravitational effect on the market that is impossible for other advertisers to ignore. It’s tempting to hope that ‘this too shall pass’, but I’d strongly advise brands to think about long-term strategies for surviving and thriving in this new landscape. For now, these advertisers are here to stay."

1. U.S. brands will continue to face rising ad costs and competition for market share from companies like Temu and Shein. 🤼‍♀️

These brands substantially upped their investment in digital advertising targeting US consumers in 2023 - Brian Wieser has a fantastic writeup of this trend on his Substack in which he speculates that spend from Chinese advertisers targeting the US and Canada nearly doubled from $4B in 2022 to $7B in 2023. A similar story is playing out with Google and other publishers, as many brands have no doubt felt in their auction costs over the last 6 months. US retailers across categories will face difficult YoY comps due to these aggressive new entrants to the market, and will likely see costs accelerate even further with political advertising heating up in the back half of the year.

Brands will need to unlock a new growth lever that goes beyond “better advertising” of the same products or services. Instead, brands will need to innovate their product offerings and find new ways to tap into existing customers.

2. We’ll continue to see more agency consolidation. 🤝

Not only do these mergers create better synergy and efficiency for holding companies, they appeal to brands looking for expanded capabilities and services from their agency partners.

Within the digital marketing ecosystem specifically, the increasing maturity and centrality of digital channels are key dynamics driving consolidation. Where brands may have previously sought out specialized solutions to manage nascent digital marketing investments, as those channels & practices become core to their overall marketing program, they are now looking for partners that can deliver a holistic strategy across all digital touch-points.

Deciding factors will include capability alignment (across channels, measurement solutions, industries, etc.) and geographic expansion.

"In 2024, successful brands will embrace privacy and lean into it by developing privacy programs: individual rights, internal awareness and training, commercial applicability, and accountability are all areas [successful] brands will and should explore. If you’ve never measured your privacy program it can feel monumental, but breaking it down into bite-sized pieces can make this process much more manageable: individual rights, internal awareness and training, commercial applicability, and accountability are all areas that brands need to be thinking about."

1. Greater synergy between AI and 1st-party data will drive a major shift, particularly as more self-service ad platforms become keen on AI. 🤝

Leveraging AI in combination with 1st-party data has been slow to catch on, yet creates opportunities to do cohort analyses and segmentation.

2. Brands will need to go beyond the privacy banner and develop comprehensive privacy programs - big brands that fail to do so are likely to face heavy fines. 🔐

There has been an influx of brands that collect consumer data without an explicit value exchange, and there’s a growing bifurcation between those who do this well and those who don’t.

At the end of the day, you are doing a disservice to consumers if you don’t prioritize their privacy at every turn.

3. A continued surge of Consumer Data Platforms (CDP) offering full-funnel measurement solutions will challenge brands to choose the right partner and avoid falling prey to “shiny object syndrome.” 🪩

“Consumers are going be picky about their money and even more focused on individualism and their own personal brand. Brands will need to be able to explain themselves in six different ways to ensure they are applicable to all consumers - consumers that are specific, layered, and complex.”

1. Niche is the new normal. Hyper-personalization, which we first tackled in 2021, will be taken to the next level as brands unlock better audience targeting (and as they continue to embrace AI). 🔑

Identifying super-specific customer segments is just the first step - brands will need to be able to back up these findings with relevant and evocative ad creative. Tailor to fit.

It will be crucial to showcase your brand in a variety of ways so that your message is applicable to each subset of your target audience.

2. Consumers are going to be picky about how they spend their money and will seek out products and brands that resonate with them on an individual, personal level. 💳

“Retail therapy” will be a coping mechanism for consumers who are feeling the weight of the world. Feelings & emotions will drive them toward wellness brands, experiences, or items curated to their unique personal style.

“Now that we know that streaming is here to stay, streaming services will look to provide more value through partnerships with retail media and other offline sources. It’s no longer enough to just do branded-type plays.”

1. While the role of print media will continue to wane, traditional TV remains a cost-effective way to reach broad audiences at scale. 📡

2. We can expect to see more major networks enable programmatic-style buying across their linear inventory, and to do so at scale (like AMC has begun doing). 🍿

3. Bundles, bundles, and more bundles. Streaming services are here to stay, and they’re looking for new ways to drive value by partnering with offline sources like retail media. 👯

Verizon rolled out a Netflix/Max bundle, Instacart now comes with a Peacock subscription.Plus, targeting segments will open up as retail media networks partner with brands they don’t carry in their stores.

4. A big limitation of CTV right now is the lack of deep contextual insights, to the show-specific level, available for a given impression. 💡

Traditional TV buyers are accustomed to having this level of detail in their media buys, so we expect to see these merge and evolve the current digital offerings.