By: Robert Webster, VP of Strategy and Innovation, CvE
After a year that promised much, we ended up with a lot more hype than real-world action. Progress on areas like privacy, identity, and sustainability rather stalled, despite the rhetoric. My first prediction for 2024 is that it may feel more of the same for much of it, but by the end we will have, unlike in 2023, radically changed the status quo in marketing. I expect the 2024, 2025 period to be akin to the radical changes that happened in 2001/2002 and 2010/11.
So, what’s going to change? Some predictions’ pieces I have seen have talked high level about AI and Identity. What do you think? Such lazy commentary just talks about ‘the how’ things are changing without dealing in any way with what will change. If that’s all you want, then the predictions are listed below – the rest of the article goes into how these areas will shape 2024 and Beyond.
AI, AI Everywhere but not a drop to drink
It can feel like everyone is talking about the impact of AI without showing specific examples. There are three dimensions of AI for marketing that should unpick where the change will happen in 2024 and afar: 1. The type of AI, 2. The business benefit of the AI, and 3. The owner of the AI. In the following sections, I explore the various forms of AI and their respective roles in marketing. The outcomes will manifest as a dynamic blend of Automation, Performance Enhancement, and Innovation.
AI Type No. 1: Algorithmic AI. This type of AI is an evolution of the media buying algorithms that have been around for decades (It was a big part of my job to write optimization algorithms in the noughties). From famous examples such as Quantcast, Efficient Frontier, Scibids, Google Pmax and Meta Advantage+, the latest iterations from all kinds of companies are going through a generational leap which we will notice in 2024. This will allow faster and better optimization based on more data. Equally is still just an optimization algorithm. Caution on the buyers’ front to make sure they can see that the algo is working to their benefit (they often don’t) but that’s for another column. A big impact is the automation of complex buying processes. Ultimately many will claim that changes here are revolutionary whereas it’s only an evolution of what has gone before. A big watch out is not to rely too heavily on automated buying when measurement and data strategy are in a state of flux. Feed in garbage (poor attribution without incrementality) and your buying will get worse, not better. It’s not time to take the humans out of this loop just yet.
AI Type No. 2: Generative AI – Text. Chat GPT has had the fastest adoption of any technology – it also introduced the world to generative AI. In popular culture, this has disrupted the classroom perhaps most – in marketing it has transformed content. So much content is now either completely or partly built by AI. This article was written by yours truly, but AI was used as a copywriter to improve the prose and grammar. That’s saved a colleague from a job. Others produce content almost entirely AI-based (just check a LinkedIn feed) and it shows. There is a lesson here that AI plus humans scales great work, but AI on its own just automates rubbish. Both sadly will be ever more evident in 2024. New tools from everyone from Microsoft, Google, XXX, YYY is going to be about integrating these tools into the workflow. We can cheer the added productivity whilst bemoaning the mounds of rubbish we have to wade through. Getting this right in content creation is going to be a key theme.
AI Type No. 3: Generative AI – Images and Video. Generative AI in text captured the imagination in 2023 but for marketing in 2024 I think it’s the image capabilities that are going to be most transformative. Today, when people think about automated creative they think about – Dynamic Creative optimization (DCO) – systems which are based on 15-year-old tech. The idea is you have a number of templates and feed different images, animations, videos and copy into them. That was great in 2012 when you needed say 4 to 7 IAB sizes but does not suit the modern world where hundreds of formats are needed for different walled gardens and options. This is where generative AI can come in as it can allow the designers to build the “seed creative” and then allow AI to work on pushing that out into hundreds and thousands of different options. Add in an approval and learn process and you have a game-changing setup that will allow a fraction of the resource to do better work in half the time. A world of huge creative testing opportunities awaits. Note this is different to the idea that the AI will design the creative from scratch which I don’t think will be big in 2024 due to legal and copyright problems it brings up. Plus, the general theme is that at least for a while, humans plus AI will get the best results.
AI Type No. 4: Data modelling for segmentation, insights and attribution – Now this strictly isn’t a different type of AI to what would be used to build algorithms, yet in practice it’s a very different rollout for marketers and one of the most important.
This process is going to need to be core to a company’s IT setup with data being modelled on first-party data, CRM and site analytics data – primarily. Plus, potentially, data that arises from partnerships (so called 2nd party data). This will be done in core data architecture such as the cloud systems of AWS, Microsoft, and Snowflake or within CDP environments. This is not strictly new as it’s been happening for several years, but most companies are still at quite early stages of sophistication in using AI to do better segmentation, find more powerful insights (faster) and of particular importance for marketers to improve attribution efforts. We can expect that maturity in the cloud platform market combined with a real need to develop these efforts in marketing will turbocharge efforts here. Expect to see a big jump as the cookie crumbles and marketers see the need for excellence here to compete and from there expect to see incremental improvements for years to come. What this means is that marketers will start to have much better information at their fingertips in terms of what products are selling and what is driving them. They will be able to have much greater control of data segmentation and strategy (which in turn will feed AI algorithms – see No. 1). It will also drive far greater personalization on site. To get the benefits here, companies need to have very strong technology setups and in particular data strategies that can allow the power of this to be unleashed strategically to drive growth. A huge boom area for those with the chops both technically and strategically to get it right.
AI Type No. 5: Innovation. Again, taking some liberties here as this is not a type of AI – however, it does describe a very different dynamic to what we have looked at so far. In examples 1 to 4 we have seen how AI can take existing use cases and automate them and/or turbocharge the output. For innovation, it’s about inventing whole new use cases based on AI – which we will start to see emerge slowly in 2024 but will likely transform how marketing is done over the rest of the decade.
So, what do we mean by AI innovation? Well, I see AI transforming how companies communicate with customers. Today everyone who must go through an automated phone call groans and wishes they could speak to a real person. I don’t think it will be long before we will all prefer to talk to the machine, at least for some tasks. We will start to see AI-powered virtual shoppers, travel agents, recommendation systems, interior designers, nutritionists and so much more come to fruition. For whatever product or service a customer is interested in, AI can make that process more immersive, faster, and ultimately, lead to a better product outcome. Today is still a world of written content navigated by search – think how `different it will be when instead of searching for content we ask our AI butlers to build out what we are after. We are already seeing baby steps in this direction – my personal favourite examples are Dulux which allows you to see how your Walls will look in different colours, Spotify creating personalized amalgamated records and real estate agents recommending properties. These are great customer-facing tools which will be the marketing efforts of the near future. 2024 will probably only see incremental growth here, but we are on the verge of an explosion of innovation in how companies interact and communicate with customers.
Google, Privacy, Identity and the third-party cookie
Google is planning to remove the cookie. Now it likely won’t do this for most of us at scale until Q1 2025. The odds of a further delay look fairly long and rest with the CMA and equivalent regulators pressuring Google to keep the cookie for reasons of fairness. I think Google is playing the CMA and others for fools, but again that’s the subject of another article (out soon). So, the net result is a series of predictions.
Here are a series of machine-gunned predictions that all fall out of this space.
- Google will end the third-party cookie in Q1 2024 – 80% chance.
- Google will release new features that enable it to measure effectively using first-party CRM data integrations. We are already seeing the first signs of this.
- Google will slowly remove features from CM 360 and Google ads relating to tracking.
- Google’s (unfair) advantage in marketing will grow and we will see Google’s market share increase at the cost of independent ad technology – particularly across small and medium-sized advertisers.
- Google’s approach will open the door for companies to offer specialized solutions to large advertisers. These will include advanced tracking (with log files), use of new IDs and anonymous tracking methodologies, clean rooms and measurement systems. It will be a big opportunity for open ad tech but only really apply to the large, advanced advertisers.
- Small and medium-sized ad buyers will flock to the trackable and comfortable ease of Google, Meta and Amazon.
- Many independent ad tech companies will struggle. They will lack access to the major advertisers and will battle to match Google’s superior measurement capabilities. This will particularly hit the DR display space where we will see a big correction just as we did in 2010/2011.
- Publishers will take a hit. Maybe not until Q1 2025 but an underpressure sector will inevitably lose out because of this. Only those with adequate first-party data, video inventory and highly valuable audiences will be able to weather the storm. The rest will have to look to new ways to monetise their media which will take time to scale.
- Most agencies and advertisers will have to rebuild their reporting setups. The new privacy budgets in reporting APIs and removed features from the likes of CM 360 will make reporting with OrderId or extended data difficult and most existing structures will break. This will probably have as big an impact on the market as anything and most aren’t expecting it. This unseen bus will hit hard.
Companies that have been silently building product and waiting for a new cookieless world to emerge, can now explode into growth. This might need to wait until 2025. However, the real hope is that when this generational change finally happens, a new spring for ad tech can open up opportunities for the next 10 to 15 years.
Growing Media. Retail Media, CTV, New Data economy
Retail Media. It doesn’t take Nostradamus to predict that Retail Media will continue to grow – and grow it will with continued rapid advances in revenue. What is less well understood is how much of retail media today is built of sand with sticky tape and cardboard. For many retailers, their RMN networks have not delivered the promised revenues yet, and operational and technical challenges proliferate. For retail media to grow as it should it needs to really up its game. This will be a big trend in 2024 as the pressures of growth and the loss of the cookie put a lot of strain on existing structures. The rush to launch in retail media will now become a race to build long-term scalable businesses that deliver on the promise to retailers and brands alike. This needs an article of its own too, so I hope this preview into the themes of a structural rebirth whet the appetite for more to come. Another big area will be around joint funding and cooperative buying where ad budgets are partly paid for by a brand and the media owner. This can turbocharge strategic importance for brands and revenues for retailers but also needs a big evolution.
CTV is further in maturity from a technological and operational point of view, meaning the development here in 2024 is more about planning and strategy. Growth in spend is assured and more and more broadcast TV will have programmatic ads enabled. There is still a fight going on as to who will run CTV, will it be the large operating agencies that so dominated TV for decades or will there be a new paradigm? Good planning has been a casualty of this fight and is an area which progressive advertisers can gain a real competitive advantage. Don’t expect big waves in 2024 but do look out for the currents of change in who truly controls the budgets. Enhancements in TV targeting, data usage and measurement are the thrust of the wave, whilst control is fought out.
Do you agree or disagree on my 2024 predictions? Would love to learn your thoughts.
Please email me at email@example.com or drop me a note on LinkedIn.
Robert Webster, VP of Strategy and Innovation, CvE