December 19, 2022
Director, Data & Analytics
The COVID-19 pandemic has had a major impact on the way consumers behave, businesses operate, and marketing teams navigate the industry, and most of these impacts continue to be felt nearly three years after the pandemic began.
The first several months of the pandemic were incredibly challenging for many brands, particularly hospitality and retailers. However, while brick-and-mortar stores struggled, many e-Commerce brands benefitted from consumers staying home and shopping online. For most retailers, 2020 e-Comm sales showed massive year-over-year growth across a broad set of categories and verticals. Overall, according to a recent Annual Retail Trade Survey (ARTS) release, U.S. e-Comm sales increased by $244.2 billion (+43%) in 2020.
More recently, many significant developments that emerged in 2020 have normalized to an extent but many unique features persist. As we assess the current landscape, below are some important trends that characterize the post-pandemic state of digital marketing in 2022 that will also help shape 2023 and beyond.
1. Rapid change across consumer behaviors and expectations
Practically overnight, the places, times, and ways in which consumers interacted with brands changed dramatically. It became imperative for business leaders to understand the new needs and expectations held by their customers and to anticipate which would eventually diminish versus which would persist into the post-pandemic world.
2. Brand preferences have quickly evolved
Many consumers are placing increased focus on a brand’s stated (and demonstrated) values. A recent Ernst and Young Future Consumer Index showed that while quality, convenience, and price are still top of mind for consumers, other factors such as sustainability, trust, ethical sourcing, and social responsibility are increasingly important considerations.
3. Agility was, and still is, key
Brands that adopted a mindset of continuous consumer listening in an effort to capture consumer sentiment “in the moment” continue to drive increased engagement, and ultimately sales, where other brands do not. Operationally this means faster decision cycles and more flexibility across creative decisioning, budgeting & planning, and media activation & optimization. The value of organizational agility can emerge via creative problem solving, adaptive thinking, platform refinement, and focusing on driving relevant “real-time” consumer insight.
4. Focus on omni-channel, full funnel marketing
The pandemic highlighted the need for businesses to have a strong presence across multiple channels in order to reach customers wherever they are at a given moment. This continues to place an emphasis on omni-channel planning and decisioning, both online and offline. As marketers look to measure and refine their omni-channel investment mix, best practices typically include a combination of Marketing Mix Modeling (MMM) and incrementality testing.
5. Ad dollars in motions
Data from Salesforce’s 2021 State of Marketing report revealed that 44% of B2B marketers ‘completely changed’ their marketing channel mix since the pandemic began to meet new challenges and a shift in consumer behavior. A few key data points to consider that speak to the significant shifts taking place or highly anticipated:
Ad dollar concentration: The World Advertising Research Center projects that Alphabet, Meta and Amazon will take over 50% of the $1 trillion ad market in 2025. Optimizing investment across these three “walled gardens” will become even more critical in driving an optimal media mix.
Vertical-specific in-fluxes: Travel ad spend has rebounded significantly and is forecasted by some to grow at six times the pace of overall ad market by 2023.
Brand vs. performance media: The pandemic accelerated a shift away from brand marketing towards performance media despite evidence that continues to support the value of brand and efforts to avoid bias towards media that is most easily quantified. The most successful brands are striking an appropriate mix based on careful research and are also bringing their CDP-enabled 1P data closer to their media teams to fully personalize and activate media across the entire funnel.
6. Varied reactions to inflation
With inflation in the U.S. (and much of the developed world) estimated in the upper single digits, marketers are responding in a variety of ways. A 2022 survey by Advertiser Perceptions revealed that 1 in 5 marketers has trimmed their marketing budget (by an average of 16%). However, many brands are identifying pockets of opportunity such as bidding in a potentially less competitive environment and capturing valuable first-party data that’s becoming more critical as privacy remains a focal point.
How to Take Action
It’s clear that marketers have much to consider heading into 2023. While the trends resulting from the pandemic over the last 2+ years remain salient, more emerge over time. Transparent Partners helps support data-driven brands in all areas identified above, from omni-channel media mix measurement & optimization to Agile Framework operationalization to CDP recommendation & implementation. For additional insight, click here to read our blog to learn more about “Data Driven Marketing Trends to Watch in 2023.”