From 'DCO 2.0' to the metaverse: where is the digital ad industry heading in 2023?

Ross Barnes, Global CTO at mSix&Partners and The&Partnership, explores how digital advertising will evolve in 2023 and how agencies can best adapt to emerging trends.

In 2023, digital advertising will undergo significant changes. To remain competitive in challenging economic times, it will be crucial for agencies to navigate these shifts effectively.

Four key trends will shape the digital advertising landscape in the year ahead: a resurgence of interest in the authentic value of data; the emergence of new forms of collaboration between agencies and publishers; the rise of Dynamic Creative Personalisation; and growing interest in the metaverse.  

2023: the year of data awakening

2022 saw the rise of data clean rooms. Off the back of the demise of third-party cookies, brands started to leverage their first-party data to reach their target audience with increased efficacy. This, in turn, led to forms of data collaboration between agencies and clients aiming at a better delivery of ads.

In 2023, brands will wake up to the way they can use data in collaboration with agencies and other partners and become more aware of the value of the data they have. Third-party data owners will increasingly rely on their data as a value-add in any commercial relations. Brands will not only enhance their targeting capabilities, but also gain a more comprehensive understanding of their audiences and prospects.

By building a privacy-safe data partnership with a lifestyle brand, for instance, a financial services provider will be able to establish at what stage in life a prospect is. Are they about to buy a house or a new car? With the right partnerships, a provider will determine with reasonable certainty if a potential customer is looking for a mortgage, so as to address their needs promptly.   

Integration will be king

The great advances programmatic advertising has made over the past few years enable agencies to reach the right audience with the right message at the right time. This, however, has prompted the establishment of purely transactional relationships between agencies, their clients and publishers.  

In 2023, as partnerships will revolve around the idea of data as a value-add, more meaningful forms of collaboration between agencies and publishers will arise and specific emphasis will be placed upon the power of integration.

We will witness the emergence of a more collaborative approach in the way data and tech are used to ensure the correct choices in terms of data clean rooms, so that agencies and publishers can work together as seamlessly as possible. The decline of third-party cookies means a real conversation between agencies and publishers needs to start again.

The rise of DCP 

Rather than DCO (Dynamic Creative Optimisation), 2023 will be the year of DCP (Dynamic Creative Personalisation) or, as some say, DCO 2.0. Agencies will strive to make the best use of the information about their audiences, be it collected through first-party or third-party data, so as to target them with strategically relevant messaging. As generative AI will become more common, creative strategists, who have long been the gatekeepers of quality in digital advertising, will need to take a markedly data-driven approach and increase their technology literacy.

The role of creatives will gain increasing importance within dynamic creative development. They will provide guidance and strategic advice - defining the boundaries within which production specialists will forge new messages - and will engage more directly within the feedback loop. Creative teams will also have a stronger voice in the measurement of campaign effectiveness, as this exerts an impact both on the core creative ideas at the heart of a campaign and on its strategic direction. Indeed, creatives will be able to change what quality itself means.      

Preparing for the metaverse

In digital advertising there is always appetite for novelty and, in 2022, the shiny new thing was the metaverse. As 2023 could be the year the metaverse sets out on the path to the mainstream, agencies will need to stay on top of the opportunities as well as the challenges of this emerging space.

Disappointingly, there is no secret formula for success. Agencies should be prepared to invest time and energy in the metaverse without expectation of immediate return. They should be prepared to fail, too. As the metaverse is still in its early stages, not only for the number of users, but also with regard to technology and capabilities, brands might not benefit from being first-movers. Agencies, however, need to experience this new virtual world in all of its facets and make themselves part of it.

While audiences are not flocking to the metaverse yet, the run might start soon. Forward-looking agencies must be ready when this happens.        

Data and creativity will drive success

In 2023 digital advertising, like many other industries, will face significant challenges. To thrive amid uncertainty and reach their business goals, agencies will need to partner with brands and publishers at a more encompassing level. Integration will become the watchword for success.

A data-driven approach fuelled by partnerships, however, will not be enough to deliver effective campaigns without the magic that only creatives can bring to the table. Blending the full power of data with creative vision will be the key to success. 

by Ross Barnes

Global CTO

The&Partnership