An Optimistic Outlook for an Unpredictable Year

By David Kostman

Recession and performance. These are the two somewhat contrarian subjects I've been discussing with my partners, clients, colleagues, and industry peers over the last few weeks. No matter which side of the industry they sit on, everyone is searching for the answer to how we can move through a global tidal wave affecting the tech and advertising industries at their core while remaining focused on achieving strong growth and performance.

I've spent decades leading businesses that went through cycles and at times faced strong headwinds. But this year feels different. Despite hurdles like the tightening of advertising budgets and heightened power struggles between the open web and walled gardens with the impending deprecation of cookies, I have a renewed sense of optimism as we enter the second month of 2023. And yes, perhaps that's very contrarian to the doom that's underpinned most industry predictions.

Building a Pillar of Lifetime Value

In an economic downturn, there's tremendous pressure to perform in the short term. And it's understandable when the outlook is questionable and a return to normalcy is uncertain.

However, singularly focusing on short-term planning can lead to a close-minded approach. It can distract from the lifetime value of an ecosystem steeped in the DNA of the global economy.

Collectively, I believe we as an industry can do better. The famous line from the movie Field of Dreams, If you build it, they will come, doesn't apply anymore. Today, it's about building an experience that improves how users consume and explore online. Presenting consumers with more relevant experiences, in a more seamless and engaging way, will turn casual users into lifetime customers.

Measuring Performance as Both an Outcome and Bottom-Line Metric

In 2023, across the entire funnel of awareness, consideration, and performance, CMOs should be thinking about how they spend their budgets in the context of measurable outcomes. Questions should include: How can I understand how audiences are engaging with my online presence? How is each dollar I'm spending delivering on my bottom line? How can strong performance now set my business up for success when the economy turns a corner?

CMOs are recognizing they need to better understand two key elements in their media strategies: attention and impact. Are audiences paying attention to brand messages? If they are, what is the impact of that attention? How do various tactics correlate to down-funnel user engagement, and ultimately ROI?

New KPIs and expanded measurement of attention will allow both publishers and advertisers to bridge short-term results with long-term objectives. They'll deliver real results that can be attributed to their bottom line in the short term, while building experiences that inspire trust and spark deeper engagement in the long term.

With measurable outcomes as the backdrop, the next few months provide an opportunity for advertisers to attain meaningful engagement with their audiences. With better data, contextual technologies, and engagement metrics, both publishers and advertisers have an equal opportunity to focus on the user experience and cement their relationship with their audience.

Leveraging Trust as the Connective Tissue

What is the connective tissue between publishers, brands, and the audiences they're looking to engage? Trust. Trust that the content they publish, promote, or consume will be authentic, relevant, and engaging.

Premium publishers have earned the trust of users and therefore should be able to enjoy a deeper and more meaningful relationship with their users. In addition, the power and impact that video experiences can have in capturing attention and driving engagement, particularly with younger audiences, is one tool to help build this trust. Publishers who are able to incorporate video into their offering could be well-positioned to deflect the impact of a recession while simultaneously driving more engagement. In fact, eMarketer predicts double-digit growth for short-form video advertising in 2023 and expects it will be the fastest-growing ad segment of the year.

But investing in video alone is not enough — consumers are looking for more. Social media has shown us users expect a heightened level of relevance and that any advertisement must align with the content they're already consuming. Publishers must strive to provide video experiences that build user trust through consistently engaging and relevant content.

Leading with Optimism

Why do I believe this year will bring real opportunity for both brands and publishers? Digital ad spend is still growing, albeit not as quickly relative to the post-pandemic highs the industry enjoyed. And there is a real appetite from industry leaders to focus more on driving lifetime value and meaningful user engagement to create a better experience and reputation for our industry. Despite an uncertain year ahead, I believe we, collectively, can create a stronger ecosystem, stronger revenue streams for publishers, and drive better engagement all while creating an even-more trusted user experience.

The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

David Kostman is Co-CEO of Outbrain.