2023 – Is This The Year Digital Spending Diversified?, By IAB GCC’s Ian Manning
It’s that time of the year when we enter into the fool’s errand of predicting the future. So many of the major events that have defined the past few years were entirely unpredicted and, in most cases, entirely unpredictable. That said, it’s a useful exercise to pause and consider what trends we should be keeping an eye on and what the driving forces are that will define the coming period. So what follows is not so much a prediction of what 2023, but rather contemplations on some possibilities.
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Digital advertising continues to grow, but at slower pace. After a number of years of high growth, and given recent global economic upheavals it’s reasonable to expect a slowing of overall growth. In 2021 the IAB reported a 25% YoY growth rate, with social and video slightly higher. In a recent IAB Pulse Survey of our members, most expected Q4 to have modest growth of between 5-15%, although 35% of respondents expected more than that. While it’s hard to see exactly how the current global economic situation will impact the MENA region beyond the immediate quarter, it’s likely that it will be uneven, with the GCC faring better than the rest of the region. With global economic headwinds on the one hand and the GCC region in investment mode on the other, it’s tough to accurately weight the two factors. On balance, I’d expect growth to continue in Digital advertising, but at a slightly reduced pace, more like 15-20%.
TV’s cool cousin, CTV takes the limelight
With the rapid expansion of OTT and CTV players in the region and with more advertising to their monetisation strategies, this could start to have a demonstrable effect on video planning and buying. Netflix’s announcement that it was adding an ad supported tier received the headlines, but the CTV opportunity is bigger than that. In November the IAB released a CTV Landscape overview in MENA, which identified as many as 17 OTT players and at least 7 CTV apps that had advertising opportunities. As consumers increasingly seek out relevant content for their information and entertainment, and assuming these players can deliver relevant and unique content ad buyers will be tempted to shift some video budgets, either from digital channels or linear TV. Add to this the acceleration of streaming that the FIFA World Cup could herald in terms of trial and adoption of streaming services, and is a possible scenario worthy of attention.
Augmented Reality comes of age
In the social space, the trend to watch is less about the channel and more about the content delivery. With increased focus on attention and an increasing need to provide consumers with more engaging experiences online, the growth of AR is likely to be a key trend in 2023. Overshadowed by talk of the metaverse, AR is quietly becoming a core delivery approach to engage consumers and is a crucial building block on the way to a mixed reality future. Expect to see more brands building for AR, testing and trialling which will support the further development of the local ecosystem. Currently advertising and marketing is led by a few specialist companies, larger agencies and international companies will likely begin to invest in 2023, leading to more rapid scaling through the year.
An old dog learns new tricks
It’s often said, MENA is an OOH market, with high levels of relative investment due in part to the ‘over reporting’ of investment which is reporting in gross v digital which is typically net. In truth the market is likely smaller than Search. But OOH has a huge opportunity for new, incremental growth in 2023 – Digital OOH. Today there is limited digital inventory available, limited demand and limited utilisation v the opportunities that digital OOH presents to advertisers. With the opportunity for better targeting, measurement and engagement, DOOH is a revolution in OOH’s capabilities. By adding new use cases that were not previously possible, DOOH has the ability to attracting new advertisers to the medium while improving performance for the current ones, leading to further innovation and growth.
Retail Media floodgates open
A growing trend in developed markets, it seems retail media has not yet captured the imagination of local retail groups and remains confined to a few, such as Amazon. It’s likely that during 2023, there will be more impetus from buyers to leverage the opportunity, in part due to the need for more 1st party data signals. All it takes is one innovative retailer to jump on board and others will likely follow. The tech is there, the advertisers are ready and the benefits are clear. With the increased data signals and advertising inventory this will provide, expect to see rapid and significant adoption and growth. This could be the defining moment for digital media in 2023.
2023 looks set to be an exciting year, full of innovation and new possibilities for advertisers, despite the headwinds. It will, as always, require some bravery and adaptability. Those that can do both will win the year.