7 adtech trends and predictions to watch out for in 2023

by Bradley Lewington

by Bradley Lewington

7 reasons why 2023 will be a big one for adtech

2022 has been a challenging year for the adtech industry and with even more change on the horizon, the industry is now bracing itself for a period of adaptation. With this in mind, I took some time to reflect on the past 12 months and cast my predictions for the top adtech trends that will emerge in 2023.

These are my thoughts.

A quick look into the adtech industry in 2022

After a bumper year for acquisitions in 2021, which saw 90 adtech transactions made worldwide, mergers and acquisitions (M&A) has significantly slowed down this year. That’s not to say there haven’t been a few significant deals. In February, Spotify announced that it was buying podcast analytics and attribution company Chartable along with Podcast, a marketing attribution platform for podcast advertising. French adtech platform Adyoulike was acquired by OpenWeb for $100million and social advertising specialists also spent $100million on Google advertising specialist 

But, as digital media and marketing investment bank LUMA Partners explained, “if there’s one thing that M&A hates more than anything else [it] is uncertainty, and we have uncertainty in spades right now”. And while deals over $100 million did take place, “we had a big drop in scaled transactions…across adtech, martech and digital content”. 

Ad-spend optimization is fast becoming a top priority and as belt-tightening has been felt across the board. In June ad spend saw its first decline after a 15-month growth streak. The fall is representative of continuing global pressures around the war in Ukraine, inflation, and the impact of the pandemic. 

It’s also a symptom of a shift that’s taking place around how consumers take in information and the advertising industry pivoting to meet those changes. Because while spend may have fallen in general, digital ad spend grew 9% compared to linear TV spend which dropped 19%. Is this the start of the big shift from TV advertising as we’ve known it to a greater interest in advertising on connected TV (CTV)? 

On the subject of CTV, Netflix put a huge stake in the ground with the announcement of Netflix Basic with Ads. With the world facing a cost-of-living crisis and Netflix itself struggling with falling profits, it was a bold move, but will it be one that pays off? If its Q3 results with 2.4 million new subscribers are anything to go by, perhaps. The view from Netflix COO Greg Peters during the earnings call was that initial demand for its new service is “very strong. People are excited about bringing their brands and their ads to consumers around the world.”

Of course, we can’t look back on 2022 without a mention of Google handing the adtech ecosystem a little more time to prepare for a future without third-party cookies. One more year, in fact. It wasn’t necessarily surprising, but the additional time will be very helpful for the industry as it experiments and adapts to new approaches and policies. 

7 adtech trends to watch out for in 2023

Talking of new approaches, how are the events of 2022 likely to manifest in 2023 and what new adtech trends are we likely to see take off next year? 

Here’s my take. 

1. 2023 will be the year of cookieless experimentation

It’s the big topic on the lips of adtech companies and that will continue into 2023. As McKinsey put it, “the loss of third-party data will leave marketers, ad agencies, and the publishing and media vehicles where advertising appears with little or no first-party data (data directly from consumers who consent to sharing it) in the dark about behavioral and demographic insights that currently help them create target audiences and segments.”

If they haven’t already, adtech companies will need to find their way out of that dark by ramping up research into third-party data alternatives and starting to put them in place in 2023 for experimentation, rather than waiting until Google finally presses the button on removing cookies.

Demand side platforms (DSPs) in particular, need to start looking at alternatives. They especially have invested in tools and capabilities that are reliant on third-party data. If they don’t change their approach, they could quickly end up losing relevance. There are some that are ahead of the curve, that have already put in place their own consumer ID capabilities - walled gardens (a closed platform or ecosystem in which the platform owner controls the data, hardware and content) and hugely scalable platforms. These demand side platforms are the ones to watch in the post-cookie era. 

Adtech trends

2. We’ll see a rise in contextual targeting

It’s pipped as perhaps the best solution to cookieless advertising that is currently out there and will be a crucial element of the cookieless experimentation mentioned above. It’s estimated that the global market for contextual advertising will be worth around $335.1 billion by 2026, supported by “marketers making huge investments in developing new products; increase in social media users in many developed and developing countries; and increasing trend towards mobile advertising.”

Rather than using knowledge about specific users to serve a relevant ad, contextual targeting adapts the ad to the context in which it is being served. For example, if the webpage talks about music, the algorithms used in contextual advertising will include ads that are relevant to the context of the page - keywords, phrases, media. It even goes so far as to read positive and negative connotations on a page to make a decision on whether to target it or avoid it. 

Contextual advertising is not new technology - the likes of The New York Times and The Washington Post have been using it for years. As The Drum reminded us in a recent article, “contextual advertising is the oldest form of ad targeting in the media. In the age of print magazines, it was pretty much all publishers had to rely on. But as publishers moved online and technology progressed, the landscape quickly began to change. Instead of displaying ads based on what someone was looking at, many platforms switched to displaying ads based on browsing history, searches, links clicked, and purchases.”

What has changed is technology. The success behind contextual advertising today is artificial intelligence (AI) so its continuing use is going to require adaptable adtech ecosystems. 

3. Advertising at scale with AI will take off

If we’re getting rid of cookies, the adtech ecosystem needs to find another way of obtaining insights for targeting. AI, along with machine learning (ML), uses algorithms to analyze and present customer insights that adtech companies can then use to make data-driven decisions. And it does it in minutes and hours rather than the weeks or months that it would take humans. 

That speed allows companies to advertise at scale by identifying trends much quicker, as well as the agility to react to behavior changes. Along with the value that it brings to the resurgence in contextual advertising, it’s understandable why the use of AI is likely to really pick up momentum in 2023.

A recent study has even gone so far as to predict that AI advertising will be a $1.3 trillion business in 2023. 

4. Audio advertising will start to come into its own

While it’s still some way behind programmatic display and video ads, audio is becoming increasingly relevant and sought after in the adtech ecosystem.

There’s a reason that any future technology you see in science fiction films or programmes is voice activated. Our ability to consume information through audio vs visual is significantly quicker.

The proliferation of smart assistants in our homes and on our devices has given advertising companies a new avenue in which to reach audiences. It's predicted that $164 billion worth of smart home payments transactions, via voice assistants, will be made globally by 2025.

And then there is in-game audio, podcasts and even radio advertising. Where radio used to be in-the-moment with only live airing available, today there are far more options to listen back. 

If you’re still not convinced, Google very recently announced the launch of its audio ads to help advertisers reach consumers through streaming music and podcasts on YouTube and is adding new targeting options to digital audio ads. If this news isn’t a precursor for increased interest in audio advertising in 2023, I don’t know what is.

5. The lines between supply side platforms and demand side platforms will continue to blur

The Trade Desk’s launch of OpenPath in early 2022 was a bold statement to the market that the traditional approach to buy- and sell-side adtech is shifting. The OpenPath product is designed to enable publishers to integrate directly with The Trade Desk, giving advertisers direct access to advertising impressions created by those publishers. In the launch announcement, The Trade Desk said that it “aims to remove the inefficiencies often present in the programmatic supply chain for digital advertising, including opaque and harmful privileges of the walled gardens”.  

As the biggest independent demand side platform currently operating, The Trade Desk’s move into the supply side is likely to release a tide of further interest from others in the industry in making similar moves. 

On the flip side, we are already seeing some supply side platforms moving into the demand side space by developing partnerships with media agencies. In 2023, we are likely to see more platforms start to diversify their business model by developing holistic adtech ecosystems linking everything that is involved with programmatic adtech, including sellers, publishers, buyers and data platforms. 

6. Connected TV (CTV) will increase in popularity

With integrated artificial intelligence, it offers a natural home for real time first-party data collection and therefore better opportunities for targeting with information about the household, device and location.

Following what seems to have been a trend this year for big announcements early on, another industry stalwart Nielsen started 2022 with a bang by announcing Streaming Signals, a new solution that “aims to help media buyers and sellers understand which member of a household is consuming a given connected televisions (CTV) program in real time”.

2023 will be the year that brands really start to invest in CTV, delivering ads that target viewers with relevant messages to bring awareness to a brand by narrowing audiences by behavior, demographics, context and even the time of the day. 

But CTV’s success has also become a double-edged sword and has driven a rise in CTV-based ad fraud. Following a 69% increase in bot fraud in 2022, ad fraud prevention is set to become an industry-wide imperative in 2023.

7. More advertisers will look to video games as an opportunity to reach new audiences in the worlds that they hang out in

In-game ads aren’t new to the adtech world, but they have had limited uptake amongst advertisers outside of the in-game ads that you may be used to seeing in hyper casual mobile games. That is likely to change in 2023 as advertisers recognize the opportunity that video games offer from a cookieless personalization perspective. As I discussed in a previous blog, without collecting personal data, advertisers can deliver in-game ads that are tailored to how players of that particular game behave and act in a virtual world.

It’s important though that in-game ads and in-game audio are as least disruptive and as relevant as possible to players. Seamless delivery will be the key to delivering gaming advertising if advertisers are to be successful in this space in 2023.

Lastly, while it’s not a prediction or trend for 2023, it would be remiss not to mention somewhere in this blog the very recent moves from Elon Musk following his purchase of Twitter and the impact those moves have had on ad revenue. Musk himself admitted that Twitter has seen a “massive drop in revenue” as advertisers pause spending on the social media platform. It’s too early in his takeover to suggest how the pause may continue or not but - as always - Musk’s antics and their impact on Twitter will be one to watch in 2023.

Concluding thoughts

So there we have it. Those are my predictions for the top adtech trends for 2023. Whatever 2023 brings - whether it’s any of the suggestions above or adtech trends we haven’t even considered yet - I think we can all agree that it’s not going to be boring. With uncertainty and possible recession looming, the adtech world will be looking at how it can make the most of new opportunities while embracing efficiency. 

What are your thoughts on the future of adtech? Get in touch - I’d love to hear them.

Last Updated: 10 October 2023

Bradley Lewington

Bradley Lewington, Sales Executive

In an industry defined by constant innovation, Adtech specialist Bradley helps customers realise their strategies with reliable, scalable infrastructure.
He’s a Reading FC and F1 fan, and father of two.


Related articles