2022 was pretty action-packed for paid search, SEO, and conversion rate optimization, and it looks like 2023 will be even more exciting. Based on what we’ve learned in the past year, we predict that the biggest changes in digital marketing in 2023 will come from:
- Privacy and data security
- Walled garden digital ecosystems
- The battle of the oligopoly
- The multi-touch attribution model’s death
- Frictionless brand experience
None of them are completely new; they’re all the products of a continuing evolution in data, technology, and marketing.
Let’s explore how these factors will affect paid media, SEO, analytics, and CRO. In many cases, these factors combine to produce specific developments, which is only natural as marketing becomes more integrated and holistic.
Privacy and Data Security
A lot has been written in the past two years about the growing concerns from legislators, primarily in the US and Europe, regarding the unchecked ability of large corporations like Google, Facebook, and Apple to track users across the digital world and share private information with advertisers. In some places, legislators have already developed laws requiring all companies to deal more carefully with user data (e.g., GDPR).
This led to sweeping changes for industry giants. For example, Apple’s iOS14 required users’ consent to be tracked and also limited how much and how long platforms and apps are able to use this data.
Next, Google joined in, proclaiming they would eliminate all third-party tracking cookies from Chrome. While this action has already been delayed twice and is now set for June 2023, the phrase “cookieless world” has been incredibly popular among marketers, generating an estimated global search volume of 1,600 on average per month in 2022.
Here are the biggest implications of increased data security for businesses:
- Prepare to rely more on zero- and first-party data which includes users’ full consent. Each business must find ways to engage with customers, earn their trust, and discover more opportunities to collect rich first-party data
- Adapt to completely eliminate use of third-party data
- Adopt a secure data warehouse, preferably cloud-based, to store your clients’ information safely. Google, Facebook (Meta), and Apple do not want to carry the responsibility of storing private data which is partly why you may have heard the term “server-side tagging” floating in the ether
- Consider upgrading to a customer data platform (CDP) such as HubSpot, Bloomreach, Insider, or Segment to use machine learning modeling to create audience segments
- Work to fill data gaps for the large platforms and upgrade to solutions that could work well in a cookieless world
- Google’s Enhanced conversions
- Transitioning from Universal Analytics to GA4
- Facebook conversion API
Walled-Garden Digital Ecosystems
An ad platform known as a “walled garden” is a closed system where the publisher controls all the buying, serving, tracking, and reporting of the data. This is frequently used with first-party data advertising.
The primary repercussion of eliminating the current industry standard of third-party cookie tracking for Google, Facebook (Meta), or other data purveyors is a steep increase in gaps of data and loss in visibility when users leave the platform. For platforms like Google and Meta, it makes it extremely difficult to stitch together audiences and create a true customer journey. For marketers, this results in wasted spend. This is especially true for businesses with long buying funnels.
Google’s initial solution, called FLoC (Federated Learning of Cohorts), was to create a partnership of data between platforms and send the data to a “clean room” where user data is anonymized and grouped for targeting. Getting that partnership to agree was such a challenge that, instead, each company has chosen to solve for the gaps in data on its own by further adopting something that Amazon has been doing for years: encourage every engagement to happen on their proprietary platform and discourage traffic from leaving. This allows the platform to completely control tracking with no gaps in data and no need to share or partner with anyone else.
For marketers, the rise in walled gardens means they will have to adjust accordingly:
- Expect less site traffic and more engagement offsite
- Create the ability to collect leads or transactions on platforms (e.g., lead ads on Facebook and Google Pay on shopping)
- Focus SEO efforts on structured snippets to provide users with relevant information on search results
- Social media management is now the cost of doing business. Social media must be actively managed by posting relevant content and responding to users frequently
Battle of the Oligopoly – Google, Meta, Apple, Amazon
Following the anti-trust calls to arms against Google, Meta, Apple, and Amazon, it is clear that legislators, users, marketers, and competitors are all trying to limit the power these four behemoths wield.
At this point legislators are trying to put the genie back in the bottle after having allowed it to happen in the first place. From a legislation perspective, the biggest concern the big four have is the control and documented competition suppressions over both supply and demand side platforms (SSP and DSP).
It is likely that in the next few years, the current structure of these digital empires will have to come apart and more competition will enter the marketplace which will result in further innovation.
From a marketer’s perspective, this will be good news.
The platforms over the years created black-box products that use automation and machine learning to optimize campaigns (Google’s Pmax campaign is the latest example); however, they have also gradually limited the visibility and insights marketers can have and the levers they can pull to optimize performance themselves. This resulted in a continued squeeze in profit margins.
Breaking up the demand and supply side and introducing more competition will eventually lead to a decrease in advertising cost and added control on spend.
This has already started. Programmatic platforms like StackAdapt and TradeDesk have been competing against Google and lowering the price on display and Connected TV all while providing insight and levers for marketers. Speaking of Connected TV, streaming just passed network TV in viewers, a trend that will likely continue in years to come.
Up until now, programmatic vendors could not compete on Google Search, YouTube, or Facebook. The future might look different.
At present, Meta and Google are already seeing declines in their user base, specifically from Gen Z who are primarily moving to TikTok even when searching for products or services. For marketers, the need isn’t only to diversify, but to do so with relevant content by using influencers and user generated content (UGC).
The Final Nail in the Multi-Touch Attribution Model Coffin
Let’s face it, the multi-touch attribution model has always been a difficult problem to solve for everyone from e-commerce to lead generation.
Relying on in-channel reporting resulted in inflated conversions. Settling for last click attribution in Google Analytics ended with giving credit mostly to brand and discrediting everything that happened before.
Attribution platforms came with new and improved ways to track, measure, and assign value to every step in the buying funnel, but they were not without faults. In most cases, attribution platforms have a hard time understanding the value of impressions that do not result in a site click or offline and offsite engagements. Additionally, all attribution platforms struggle with businesses with long multi-touch funnels such as lead to sale in B2B SaaS or lead to enrollments in higher education.
The increase in privacy will undoubtedly result in further holes in the Swiss cheese.
Marketers then need a different solution. While they can still rely on one source of truth for absolute reporting, businesses need to begin to measure incrementality instead of attribution, i.e. answer the question: what is the added value of running or not running a particular campaign?
The best way to do that is to run a series of market match tests in which specific locations are being tested while other locations are held back as a control and measure the impact of that particular activity. In this case it is critical the locations are chosen wisely and that not too many tests run concurrently.
Frictionless Brand Experience
Gaps in data, increased offsite engagement, and proliferation of offsite contact with audiences can all lead to same danger: brands miscommunicating internally and externally with their customers.
In a sense, digital marketing is jazz. Each component can play beautifully on its own, but when combined together they all must share information and collaborate to create a seamless and frictionless experience: SEO, PPC, social media, reviews management, CRO, and every other part of the digital landscape. All play a critical role in the decision-making of the user.
Staying in front of the user no matter where they are in their journey requires creative and critical thinking. As we plan with our clients, we consider how these marketing phenomena as well as many other factors impact the user journey to help solve difficult digital marketing challenges.
Want to know more? Contact us to learn more about the (un)Common Logic approach to digital marketing.