From facing down a recession and retaining talent to harnessing data and coming to grips with new tech, the marketing industry is set to face several significant challenges in 2023 - but how are the experts planning to respond?
Creative and strategic intelligence resource Contagious surveyed over 100 global CMOs, CFOs, CSOs and CCOs for its annual Radar Report to gain an honest insight into the current state of marketing and advertising.
Many of the industry’s leading creatives from the likes of WPP Global, Dentsu Creative, McCann Worldgroup, among others, offered a transparent insight into what’s demanding their attention in 2023.
In an industry covering such a wide variety of businesses and subsequent objectives, identifying consistent priorities in terms of which challenges to tackle is in itself…a challenge.
For example, research from IAB Europe earlier this year identified sustainability as a top three issue for the industry, however, in the case of this research, sustainability quotas and targets are only viewed as the industry’s biggest challenge by 3.1% of respondents.
Of far more significance is the possibility of recession and budget cuts (51%), retaining and recruiting talent (21.4%) and understanding and responding to consumer behaviour (17.3%).
Interestingly, as with sustainability, harnessing new technologies was similarly put aside by the majority of those surveyed, with less than one in ten creative leaders (7.1%) putting it atop their list.
Rob Reilly, CCO of WPP Global, commented on why the biggest challenges ultimately come down to a business's bottom line: “It’s easy to be great when things are great. It’s much harder to be effective and innovative and get more for less when things are challenged, but that’s our job.”
Alex Hesz, CSO at Omnicom, added: “Marketing services remains an over-supplied industry and we are all going to have to work out how to maintain growth, how to maintain margins, and how to survive in a hyper-competitive market when clients’ fees are reducing.
“The consultants are coming for our lunch.”
Using data creatively and tapping into tech
Data is currently viewed by many industry leaders as an underutilised creative resource. Almost three quarters of survey respondents (73.7%) agreed that data is not being used to its full potential.
Obviously, part of this is because stringent data regulations, new consumer privacy laws and the shift away from cookies has hamstrung some businesses and forced them to re-think their data strategies, but 31.3% of those surveyed maintain that it is key to creative solutions.
Just 1% of respondents believe data has nothing to do with creativity but not everyone agrees that it facilitates imaginative innovation. A significant 21.2% of industry leaders believe data is in fact stifling creativity.
These findings indicate that data is undoubtedly in a transitional period in terms of understanding best practice and a clear solution for streamlining data collection to make it work for your business is yet to reveal itself.
An equality opaque issue is technology and how to best incorporate it into a marketing mix. Experts widely agree that AI is spearheading a dramatic shift in the industry, with 68.5% of them agreeing that generative AI will radically disrupt advertising and marketing over the next five years and 14% believing it already has.
PJ Pereira, creative chairman and co-founder of Pereira O’Dell, believes there is “nothing in the last 10 years” that has had the impact on his business “that artificial intelligence is going to have in the next 10”.
“Automation and generative AI could change the creative process to the extent that mid-level advertising – expensive but forgettable TV ads – will be made in a matter of hours using AI,” he said.
Brand purpose and transparent sustainability communication
Contagious' survey indicates that brand purpose still has a place in advertising for almost half of businesses (49.5%) with the caveat that it must “correlate to your brand”. However, less creative leaders are convinced of its ability to increase market share, with less than a third (32.3%) stating that putting purpose at the heart of a business will generate sustainable growth.
According to the data, the most significant driver for brands developing a more meaningful purpose is coming externally from the consumer (40.4%) via user generated content such as social media posts, with the brands themselves narrowly behind (37.4%).
Consumer expectations remain a driving force behind a brand’s decision making and as indicated in the study, changing consumer demands are pushing brands to emphasise sustainability despite it not being their number one priority.
Communicating sustainability has become a point of difficulty for many businesses and survey respondents largely put this down to the financial burden of actually initiating change (39.2%), particularly amid the current state of global financial uncertainty.
Adding to this challenge for 25.8% of respondents is the logistical difficulty of backing up sustainability claims, with misinformation and negative backlash from the public putting marketers on edge.
Rob Reilly said: “You can call it purpose, you can call whatever you like – I want people to stop calling it a trend.
“We’re in an interesting time where it’s really in our hands to make a positive impact. I hope that continues and brands see it as real marketing dollars, not just a nice to have.”
Overall, 2023 undoubtedly presents a myriad of internal and external challenges, potentially increasing the pressure on marketers to raise their current standards in the face of restricted budgets. Marketers themselves seem unhappy with the current state of the bulk of their work, with 79.2% of respondents branding it “totally average”.
Despite this however, 72.7% of creative leaders surveyed feel optimistic about the state of marketing and advertising as we continue on in 2023, indicating that while success won’t come easily, there is just as much opportunity as there has always been for businesses to separate themselves from the competition and raise the bar.