The deprecation of third-party cookies has caused angst amongst marketers since Google made their first announcement in 2019. However, what the loss of third-party cookies (currently slated for 2024) has really given our industry is a chance to recalibrate on what matters most – creating meaningful interactions between people and brands. In a cookieless world, those interactions hinge on a brand’s first-party identity and data strategy. Looking forward to 2023, the trends that will move us are those that focus on combining data and technology to create informed customer intelligence, delighting customers, and delivering ROI for brands.
Trend No. 1 – The QR code is a brand’s direct customer connection
Created in Japan in 1994 to track automobile parts during manufacturing, the QR code entered digital marketing toolkits in the 2010s with the proliferation of smartphones. However, their adoption was less than stellar as consumers simply weren’t ready. Fast forward, the QR code is listed as a top three retail automation trend to watch by eMarketer, and it is estimated that 89 million people will use QR codes in 2022, growing to 102 million by 2026.
Tailwinds: The pandemic permanently changed consumer behavior. People now want and demand touchless technologies to engage with the brands they love. For brands, especially CPG companies who have not traditionally had direct customer access, QR codes enable them to connect and engage with customers. Through this direct engagement, brands can create smart, real-time interactions, while simultaneously building their first-party data and identity graphs, creating true customer intelligence informing everything from product development to future marketing campaigns, all while enabling direct customer experiences.
Headwinds: For many consumers, it’s still a new behavior. When adopting anything new, brands need to ensure the engagements they create are meaningful. If customers don’t see real value, at best they will not engage and at worst they will take their business elsewhere.
Your next step: Evaluate where you have gaps in your customer journey. Are there places where you have not been able to connect directly with your customers? If so, consider how QR codes may give you the direct connection and customer insight you’ve been looking for, and equally, the opportunity to use insights you already have to make their QR-accessed experiences better.
Trend No. 2 – Everything is an ad platform
It wasn’t long ago marketing was rife with talk and fear of walled gardens, essentially closed advertising networks that have addressable audiences and the ability to measure ad performance within their walls (but often constrain the flow of data back to brands). However, as brands and publishers have increased their first-party data, they can also play in the addressable advertising market, with major brands creating their own media networks or smaller brands joining forces. Retail Media Networks (RMNs) are the prime example and they are proliferating quickly, expected to account for $37.39 billion in US ad spend in 2022. Uber, Netflix, and even Apple are now ad networks as well.
Tailwinds: Recent Acxiom research, commissioned from international strategy and research agency MTM, noted 55% of businesses believe RMNs will deliver higher conversion rates because advertising appears when consumers are actively shopping and willing to spend, the holy grail of advertising. In addition, with global economic uncertainty, brands are looking for new revenue streams. Netflix’s and Disney+’s addition of ad-supported tiers created much fodder for industry chatter, and in the grocery sector, there’s even speculation the proposed merger of grocery giants Kroger and Albertsons could lead to an RMN capable of reaching 85 million households. Ad networks are everywhere.
Headwinds: For those brands considering creating a media network, they require major capital investments, which can be a hard sell with inflation and interest rates on the rise. In addition, advertisers relying on MECE (mutually exclusive, collectively exhaustive) segmentation strategies may choose to stick with one or two major players. Likewise, without third-party cookies and advertising scattered across proprietary media networks, measurement becomes even more difficult and multi-touch attribution a herculean effort.
Your next step: If you’ve invested in first-party data with connected identity and have a large audience, creating your own proprietary network is worth doing the business case and ROI analysis to determine if it makes sense for your brand. As always, customers need to be at the heart of any decision you make – with privacy-safe data practices critical and a people-first approach pivotal to your ultimate success.
Trend No. 3 – The Metaverse Gets Phygital (yes, it’s a word)
The metaverse can feel like an intangible place, disconnected from our physical reality. However, the richer, more immersive interactions the metaverse can deliver through augmented and virtual reality (AR and VR), have real world, brick-and-mortar benefits for brands who are willing to bridge the divide. A great example is Chipotle, who through their Chipotle Burrito Builder, launched on Roblox, gave 100,000 entrees to players who successfully completed their burrito rolling challenge, driving real people into their fast casual restaurants. It’s not about the metaverse or the physical real life, it’s how they come together – it’s phygital.
Tailwinds: When consumers are exposed to AR and VR, they generally respond positively. For example, in a recent Acxiom study, we found that of the 30% of people who have used an immersive shopping experience, like virtual showrooms or try-ons, 78% were satisfied with the experience and 48% ended up making a purchase. AR, VR, the metaverse – it’s all part of the phygital world.
Headwinds: The metaverse is still seen as merely conceptual by many, with 60% of US adults agreeing they do not understand the purpose of the metaverse. Contributing to that confusion is the conflation between Web 3.0 and the metaverse, with Web 3.0 focused on the democratization of the Internet and the metaverse focused on virtual experiences, related but not the same. Throw into the mix the collapse of cryptocurrency exchange, FTX, and you have multiple cutting edge technologies confusing and concerning mainstream markets and consumers.
Your next step: Start exploring now. The metaverse is a place for incredible innovation with the potential for meaningful, fun customer experiences. Consider who your customers are, where they are, and what makes sense for them. While gamification is a natural place to consider, there are endless examples of virtual experiences that can lead to real world interactions from virtual auto showrooms to augmented reality in stores.
Rapid, Rewarding, Relevant
Marketers are awash in technology options from cloud, AI, and ML to CDPs and data clean rooms to AR, VR, and the metaverse. It’s easy to be overwhelmed, but the one common driving force behind these trends is consumers’ desire for rapid in-the-moment, relevant, and rewarding, personalized experiences. Experiences are enabled by insights built on a solid data and identity foundation. Brands who focus on delivering experiences that delight and surprise their customers in the best possible way will ultimately come out the winners, no matter how the technology evolves.
