Explaining the rapidly changing digital advertising industry! What are the future predictions for 2024 and what should marketers prepare for? |[Report]Digital Marketers Summit 2023 Summer

The first half of 2023 was rocked by the rise of AI, the emergence of emerging forces such as retail media, and a wave of layoffs, and advertising platform companies were forced to respond to changes. What changes will occur in the second half of the year and beyond 2024?AtalaMr. Tsuyoshi Sugihara of “Digital Marketing Summit 2023 Summer” and explained his predictions for the near future and what marketers should prepare for.

Looking back at 2023

Before predicting what changes will occur in the digital advertising world after 2024, we first looked back at the first half of 2023. Mr. Sugihara is a media company for advertising operators managed by Atara.Unyoo.jp” published in early 2023 in “The first year of Japanese retail media: 2023 industry forecasts for advertising platformsBased on the article, I looked back on the following three points:

1. 2023 will be the first year of Japanese retail media/xmedia
2. TikTok, Amazon, Pinterest, etc. increase advertising share
3. AI Impact: ChatGPT is included in Bing, impacting search engine user behavior and advertising business

Point 1: 2023 is the first year of retail media/xmedia

The biggest movement in the digital advertising industry in 2023 is the “first year of retail media/xmedia.”

First year of retail media

In the past, some companies have been quick to get started on retail media, but now even the largest retailers are starting to get into retail media. A recent example is FamilyMart and Don Quijote joining forces to enter the retail media space.

Working in retail media requires having a lot of good first-party data. The trend in retail media utilization is to utilize such excellent and abundant data in marketing, including advertising.

FamilyMart and Don Quijote, two companies with many advertising IDs, forming a platform together had a huge impact on the industry (Mr. Sugihara)

Another big topic is that Aeon Next’s online market business “Green Beans” announced that it would adopt the retail media platform “CitrusAd” even before it started.

This is a very exciting initiative that shows how passionate Aeon is about retail media. It is expected that various companies will continue to enter the retail media industry, just like in the United States and other countries (Mr. Sugihara).

x media first year

“X Media” is a term coined by Mr. Sugihara and refers to the use of first-party data by non-retail companies to develop advertising businesses. In the United States, a variety of companies outside the retail industry have started advertising platforms, leading to a situation where it is sometimes referred to as “Everyone’s an Ad Network.” From now on, in Japan as in Europe and the United States, companies that possess large amounts of high-quality first-party data are expected to enter the advertising business, not just retail. For example:

• Uber Journey Ads: Targets consumers as they move with a purpose in an Uber car by running ads that encourage purchases and brand awareness, such as showing ads for businesses that are on the rider’s destination. attract attention. Expansion has also begun in Japan.

• docomo Ad Network: An advertising platform that can be distributed to Message S, My Magazine, and dmenu based on docomo users. Initially distribution has started within Docomo Media, but it has been announced that in the future it will also be possible to target external media using this data.

Furthermore, Mr. Sugihara points out that the platform industry is entering a phase of decentralization, as shown in the diagram below.

It is important to judge where the users you want to target are and to be discerning when choosing a platform. It is necessary to master a variety of media (Mr. Sugihara)

Japan-specific challenges

As described above, retail media and x-media will become more popular in the future, but the following five issues are specific to Japan:

1. He will be launching an advertising business, which will become a large-scale DX project.Therefore, the management issue is whether it is possible to invest in/promote large-scale DX projects.

2. Retail e-commerce is still under development = poor advertising inventory.First of all, I think the trend will be to monetize through external distribution such as signage and develop your own EC media.

3. Is it possible to secure digital and marketing human resources?

4. Just because there is a lot of first-party data does not mean it is suitable for advertising business.It is also necessary that the data is suitable for targeting.

5. Can the advertising/marketing department and sales promotion department of a consumer goods manufacturer collaborate?Retail media uses budget in collaboration with these departments, so it is necessary to be able to collaborate well.

Point 2: TikTok, Amazon, Pinterest, etc. will increase their advertising share

Next, he mentioned the share of ads other than Google and Facebook.

Added “Search Ads Toggle” feature to TikTok ads

With the Search Ads Toggle, TikTok ads can now be displayed not only in the feed but also in the search results screen. When configuring settings for each ad group, turn on the “Search Ads Toggle” to enable the distribution of search ads.

Started delivering ads to off-site sites such as Amazon ads and Pinterest

Off-site distribution is now possible with search ads within Amazon. Amazon ads appear when you search on partner sites such as Pinterest, which is the same form of advertising that Google has traditionally excelled at.

The key points are that Amazon advertising has expanded advertising outside of Amazon, and, like TikTok, it has entered search advertising, which was Google’s stronghold.

Search advertising will become stronger in the post-cookie situation. This trend will continue in the future, so it would be better to think about your advertising budget while keeping in mind that your options are not limited to Google ads, Yahoo! ads, and Facebook ads as before (Mr. Sugihara)

Point 3: Impact of AI

Research conducted by MIT and McKinsey has shown that AI will have a significant impact on marketing, making it impossible to ignore.

For example, consider the process involved in implementing a campaign. As shown in the diagram below, AI is involved in all of these processes: market analysis/competitive analysis, strategy planning, campaign planning, creative production, hyper-personalization, and monitoring and insights. Mr. Sugihara says, “The challenge is how humans should be involved as marketing professionals.” Some major platforms have already implemented AI in their management screens, and many users are using it conveniently.

Broadly speaking, the operations of advertising platforms can be divided into three types: “bidding/targeting”, “traffic submission”, and “reporting/insights”. AI has been implemented in “bidding/targeting” for some time, and it is no longer uncommon. AI is also used in “Reporting Insights”, for example to present optimization plans for Google Ads. Finally, generative AI is also coming into play for “submission”.

Since generative AI has been introduced to the submission process, this means that AI has been included in the entire advertising platform business. We are currently in the early stages, so the use of AI will continue to advance. This may sound extreme, but we are moving closer to a world where you can just enter the URL of your website and it will create a campaign for you, it will create the creative for you, it will control the bidding logic, and you will only have to make optimization decisions. I think there are (Mr. Sugihara)

Near-future predictions for 2024 and what marketers should prepare for

Based on what has been said so far, I have listed three major topics as predictions for the near future of 2024 and what marketers should prepare for.

① Realize hyper-personalization using AI

Mr. Sugihara says it would not be surprising to see companies starting to work on hyper-personalization using AI as early as this year or next year. It is thought that AI-driven marketing operation support systems like the one shown below will emerge and realize hyper-personalization.

Even if you generate 1,000 types of banner ads according to the prompts, it would be difficult to manually enter them from the management screen as before. Therefore, we will create a total system by linking systems end-to-end, and use the power of generative AI for various measures such as advertisements and applications. I think systems like this will be introduced soon in European and American companies (Mr. Sugihara)

Although the impact of AI is significant, there are many things that cannot be done. As shown in the figure below, human intervention is still required.

For example, humans must give meaning to data, check data, and provide feedback. In other words, “Human-In-The-Loop” (AI with human participation) becomes important. I think marketers will continue to be responsible for determining what meaning to give and what kind of output to seek after understanding these mechanisms, marketing on-site work, and AI (Mr. Sugihara)

② Retail media continues to expand

Retail media will continue to expand. There are three points:

1. Major supermarkets and convenience stores are starting the business in earnest, which will serve as a major opportunity for excitement.
2. Several years of searching for Japanese-style retail media
3. Even if it is not a group company, we can see strategic collaboration to integrate IDs and traffic.

③ Rise of closed-loop social shopping

Closed-loop social shopping has been a hot topic lately. Up until now, even if product information was displayed on social media, clicking on it would take you to an e-commerce site and make the purchase there. However, there is a trend to allow users to click on product information and purchase it directly within the platform. TikTok is leading the way. It has been a great success in China, is currently being launched in the United States, and is expected to spread around the world in the future. However, although this closed-loop model has advantages for sellers, it also has disadvantages.

Conversion rates are higher when a purchase is completed on the platform. This is an advantage for sellers, but the disadvantage is that the platform has control over user data. We need to consider how to interact with the platform based on these advantages and disadvantages (Mr. Sugihara)

What marketers need to do towards 2024

Lastly, Mr. Sugihara summarized five things that are required of marketers:

1. Discernment and integrated management skills are required during the platform decentralization phase.
2. Master and understand AI to include it in AI’s Human-In-The-Loop
3. Understanding and trying out first-party data, alternative solutions for the end of Chrome’s third-party cookie support in 2024
4. Assess and prepare for closed-loop commerce on your platform
5. After properly understanding and experiencing marketing in the field, move upstream.

He concluded his speech by saying, “Even after 2024, I hope that he will continue to play an active role as a marketer, aiming to become someone who can connect marketing with management/business strategies and business results.”