From scrolling to streaming: how digital’s pivot to video will impact brands
Opinion: Strategy Leaders
Navigating economic volatility requires understanding the evolving digital market and making strategic investments.
Throughout the economic turbulence that has characterised the last three years, there has been a clear trend to maintain, rather than slash, marketing budgets. This has witnessed a sensible focus — both in strategy and column inches — on branding, establishing share of voice, and maintaining market share.
Although prioritising the top of the marketing funnel in this manner has been useful, we should certainly not lose sight of other parts of the funnel, and in particular taking a view on the role of digital channels.
Now is a good time to have this conversation because we’ve already seen advertising demand for digital platforms decrease, as evidenced by the earnings reports of companies like Meta, Snap and Alphabet, the latter of which saw profits fall 34%, its fourth consecutive drop in quarterly profit.
Much of this can be explained by the high cost-of-living and a lower volume of goods being sold, which has led to a focus on specificity and efficiency when it comes to planning and activation, rather than volume of spend and scaled activity.
Of course not all areas of digital spend are falling. Ecommerce gains have resumed amid macro headwinds, and search and online video are also set to grow this year and will gain a greater market share as those platforms’ capabilities improve.
Getting your video strategy right
Crucially, within the major digital platforms, we are also seeing a pivot away from text-based social towards video. Indeed, social platforms have been spurred to reappraise their video offerings entirely in order to compete with TikTok.
Alongside this, the mechanics used to serve content are shifting away from social graphs and ‘who you know’, to AI-driven, algorithmically delivered models. And this isn’t just for platforms that have traditionally been video-first; Meta also wants a bite of the cherry and is increasing its spend in Reels to boost profits.
Against such shifting trends, advertisers will be under significant pressure to get their video strategies right — with one obvious concern being brand safety, which remains a priority in the wake of ad placement and misinformation scandals.
However, in a sign of evolving maturity, I’d argue the social platforms recognise the opportunity is theirs to lose and will continue to work hard to de-risk their offer over the course of the year.
Moving forward and adapting
Structurally speaking, video is one area in which digital platforms can be seen to be maturing. But there are others — such as cookie deprecation and Apple IDFA — which show a clear direction of travel.
Yet more than that, the big digital platforms are focusing their investment on core areas and products — in certain cases rationalising their offer — rather than taking a jack-of-all-trades approach.
This is good news for brands as these areas are almost universally aimed at driving advertising revenue, signaling potential improvements in both quality and engagement. A more closely defined focus is also paving the way for investment into retail media capabilities, as well as focusing on enhancements in search and ad products using AI, something we’ve seen in headlines around Microsoft Bing AI and Google Bard.
Indeed, this move towards AI-powered products is a clear indication that the industry is not only maturing, but moving forward and adapting.
For agencies, there is a clear role here to offer specialist expertise to help brands navigate any associated complexity that will naturally occur from digital maturation.
While for brands, it’s important to understand how and why the market is changing, and where investment should be made during a period of difficult — yet still cautiously optimistic — economic turbulence.
Growth will return, even if it’s currently stalled, and when it does the conditions throughout the marketing funnel could be different enough to warrant a revised approach and appreciation. Understanding that early will be hugely beneficial from a strategic investment point of view.
Bhavin Balvantrai is chief market analyst at OMG UK
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