Top 5 Digital Transformation Trends In 2023
By: Elsie Merhi, Account Manager Social Media at OMD UAE
Every year, we see unexpected new digital trends that lay the groundwork for the future of marketing. The worldwide pandemic has triggered an inevitable surge in e-commerce and digital activity while pushing businesses beyond their comfort zone since 2020. Making businesses adapt to the new lifestyle such as investing in a digital supply chain, opting for a hybrid working environment, and investing in cloud systems to name a few. This won’t be slowing down as we’re expected to see an ever-faster development of technologies. As we are nearing 2023, it has set itself up to be another phenomenal year in terms of digital and transformative technology that focuses on efficiency and sustainability for the year ahead.
With that being said, here are my top 5 digital and technological transformation trends for the upcoming year:
- Automation & the rise of Artificial Intelligence
- Metaverse
- Web 3.0
- Data Privacy
- Environmental, Social, and Corporate Governance (ESG)
Automation & the rise of Artificial Intelligence
AI success is becoming common and many companies are planning to adopt and integrate AI into their digital marketing approach within the coming years especially as we step forward in the Third Connected Age. The majority of our basic routines will eventually be automated through machine learning and AI across most industries. According to Analytics Insights, The vast majority of surveyed retail executives (80%) expect their company to adopt AI automation within the next three years. Moreover, various industries have integrated AI in their marketing and supply chain management applications as well as increasing their use of AI as a service within cloud providers that store your personal data which would transform the way jobs and businesses are conducted. The increase in AI will definitely require an increased in governance to define structures and processes that enable responsibility and accountability to name a few. All in all, this has showed us that deep learning, autonomous decision-making, and natural language processing all have the potential to significantly advance AI for years to come.
Metaverse
The term ‘Metaverse’ was originally coined by American sci-fi writer Neal Stephenson in his book called Snow Crash, which came out in 1992, depicting a dystopian-like future where the rich escape to an alternative 3D reality. Fast forward to 2022, digital transformation has accelerated resulting in today’s creation of the “Metaverse”, a multidimensional digital world and a new marketing channel. The idea of immersive, experiential technology is central to the metaverse as it enables a mixed reality, reshaping the relationship between users and brands across different industries. As for brands adopting the Metaverse, they use it as a new marketing channel in which marketers will create new and immersive experiences with one-to-one connections as they are trying to create their presence and own their own spaces via virtual shops in the metaverse. Gartner reports that 25% of people will spend an hour per day in the metaverse by 2026 for many purposes such as work, social events, shopping, education, and entertainment. Moreover, 30% of organizations worldwide will have their products and services ready for the Metaverse. We also see tech companies such as Snapchat investing in interactive tools embedded with advanced AR capabilities that are accessible to all with or without a VR headset, allowing it to be more accessible to the mass while driving the adoption rate.
Web 3.0
With the rapid technological advancements of the digital age, we find ourselves entering the third generation of the world wide web. Web 3.0 is the next evolution of the internet that helps users interact with its core feature of decentralized applications built on blockchain technology. This reimagined form of digital identity which fosters decentralization that would disrupt massive industries that include trust functions such as middlemen. It basically puts ownerships into the hands of the users online where the content would live on blockchain or transformed to non-fungible tokens (NFTs). Basically, identity is central to what many see as web3’s greatest opportunity: enabling ownership for users to reclaim their data, empowering mass customization for user’s experiences online, and providing a democratized platform such as The Sandbox to create virtual democracies. To sum it up, Web 3.0 is the next step of the internet evolution that will allow it to process data with near-human intelligence through the use of AI. This is a significant step toward the development of more open, trusting, and permissionless networks.
Data Privacy
They say don’t put all your eggs in one basket, in this case we can say the same for cookies. For decades, advertisers and marketers utilized cookies for tracking and personalization purposes to reach their target audience. However, advertising on the internet is changing with data privacy laws taking into effect and the likes of Apple and Google are phasing out third-party cookies. As we step into a cookieless world, brands and marketing leads will have to divert their strategy and focus on content-based advertising as this move will be disrupting the way we conduct digital advertising. Thankfully, there are alternative approaches to replace third-party tracking cookies which we will now look into. Brands will have to leverage first-party data of their own customers to run targeted ads. With the power of AI, ads are getting smarter as it deeply understands shopping journeys while serving relevant ads to users or predicting what they want. With Zero Party Data, users would voluntarily provide their own information to the website while being aware of what it will be used for which allows users to have full ownership of their own data. Through social media, brands and marketeers have the power to launch hyper-targeted ads as it allows for targeting through demographics, lookalikes and more. Contextual advertising helps match the advertisement with the content rather than relying on user’s data. We will almost certainly see a bigger focus on first-party data and consumer privacy in the coming year.
Environmental, Social, and Corporate Governance (ESG)
With the anticipation of next year’s digital trends, one final key point to keep in mind is the effect it has on the environment. Many brands globally and regionally have the desire to create a positive impact and are trying to identify ways to unlock sustainable growth. This has resulted in the drastic growth of Environmental, Social, and Corporate Governance (ESG) which are crucial factors that represent the advancement of an organization’s interest mainly on sustainability and ethical impacts. We’re seeing the likes of the most respected multinational companies such as Unilever and PepsiCo implement sustainable commitments to the community and environment by launching strategic transformational solutions such as The Unilever Compass and Winning with PepsiCo Positive (Pep+).
As we expect to see a rise in artificial intelligence, it is important to note that the likes of AI and deep learning machines consume huge amounts of energies and contribute to CO2 emissions. These are often hidden in clouds that most companies do not often realize. This is why it is crucial to ensure the AI models are used in a sustainable way by training them to become better, be more efficient, reduce energy usage and use new renewable energy instead.