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Since debuting in 2022, OpenAI's ChatGPT has captivated the ad industry and beyond with an ability to generate meaningful, coherent copy in a way previously unmatched by chatbot technology. Microsoft quickly invested $10 billion in the company, BuzzFeed said it would use its offerings to create content, and the tech is at the center of campaigns for brands Mint Mobile and Avocados from Mexico.

The development has put AI back on the front burner for marketers seeking ad campaigns that are quicker to create and cheaper to run, especially during a cautious economic moment that could lead to tightening ad budgets. Advanced language models like ChatGPT that use natural language processing and GPT-3 technology can generate large amounts of high-quality content at a fraction of the cost and time it takes for humans, explained Lanie Shalek, director of growth marketing at Jobi Capital.

"This could lead to a shift in the ad and marketing industries, as companies will likely begin to rely more heavily on AI-generated content in their marketing efforts for generating marketing content and writing copy across email, SMS, and social media, as well as assisting in influencer outreach," Shalek said in emailed comments.

However, while experts note that AI tools like ChatGPT could alter several aspects of the ad business, most raised just as many warning signs and noted other processes that must be undertaken concurrently when integrating AI into marketing. For now, the rise of ChatGPT is more likely to tweak marketing rather than topple the entire apple cart.

"We have yet to see AI produce something that is ready for primetime," said Gary Stibel, founder and CEO of the New England Consulting Group. "It's just not there yet — I don't think it ever will be."

Content creation

Most experts agreed that the greatest impact ChatGPT will have on marketing relates to content creation, outpacing the typical speed of the brainstorming process and solving for creative that tends to be clustered by style (i.e. all funny ideas or all serious ones). But what AI delivers in low cost and high speed, it can't quite deliver in humanity – an uncanny valley experienced by anyone who has read AI-generated text.

"I can tell when text is AI-generated right now, because there's a quality to it that doesn't quite fit; it doesn't quite make sense," said Ajay Goel, founder of email marketing platform GMass.

ChatGPT also has limits for making content from scratch: while it can pull together and compile information that already exists, it can't generate new ideas that are the lifeblood of strong marketing campaigns. So while it can allegedly pass the LSAT exam, it's unclear that it could ever buy the world a Coke.

"It's not for surfacing anything revolutionary: it's taking what exists, and regurgitating it in a way that makes sense by combining information from different sources," Goel said. "I don't think it's ever going to, in its current version, produce final copy that will actually be used and be successful in a marketing campaign."

However, the use of ChatGPT could create new jobs or at least require marketers to have new skill sets. On the front end, users must know how to best use ChatGPT to generate useful content.

"Whether you're doing market research, asking somebody out for a date, or asking a question to ChatGPT, you're gonna have people who have honed the skill of knowing how to ask the question to get the most robust answers," Stibel said.

Marketers will also need to be able to sort through AI-generated text and polish the best output. Both front-end and back-end jobs will require investment, either in trainings and hirings, but are likely to drive more content creation in-house.

Red flags

ChatGPT and AI text generation requires a human touch not just to avoid the uncanny valley but to sidestep advertising headaches. KFC's German brand in 2022 faced controversy when its app sent out an alert asking consumers to mark the anniversary of Kristallnacht with its food. The chain blamed the misstep on a “semi-automated content creation process linked to calendars that include national observances.”

"Brand safety concerns are a major issue. AI-generated copy will likely be a wonderful canvas for brainstorming ideas and coming up with draft concepts, but even under the best circumstances, brands and marketers will want a human responsible for final edits," said Mark Sturino, VP of data and analytics for independent media agency Good Apple, in emailed comments.

The ethical use of AI in marketing has also been tabbed as a priority for CMOs in 2023, per a Gartner survey, and resembles the conversation around the use of deepfakes that could lead to greater mistrust of advertising and media.

"Businesses should also consider the ethical implications of using AI-generated content, such as ensuring transparency and taking steps to prevent the spread of misinformation," said Jobi Capital's Shalek.

Even with these limits and concerns, marketers should at least be keeping up with developments like ChatGPT and determining if and how the technology will affect their work, for good or bad, in short- or long-term — if they haven't already done so.

"Whether it's an agency, a company or a consultancy, I can't believe there are good marketing organizations that don't already have a fair amount of experience with AI," said New England Consulting Group's Stibel.

In-housing found itself back in the spotlight in the early months of 2023. With influential companies claiming they’ve saved tens of millions thanks to the strategy, the space is primed to see more client-side initiatives going forward, some experts say. But third-party agencies are also in a more resilient position than in the pre-pandemic days and may have a more meaningful point of differentiation to offer brands that are juggling complicated mandates around first-party data, digital transformation and more. 

Still, the in-housing topic remains a contentious one, as brands vie to wrest control over duties that are typically the bread and butter of outside marketing services providers that may be in a fragile position with the uncertain state of the economy.

“There are voices out there that are threatened by any push toward in-housing,” said Peter Petralia, partner at the marketing consultancy Modern Craft. Modern Craft is a member of the In-House Agency Forum, a trade organization dedicated to in-housing best practices and research.

“This is part of the long-running conversation about the commoditization of agency services generally,” said Petralia, later adding that improved collaboration is also a possibility.

Few companies have had a bigger impact on the in-housing debate than Procter & Gamble (P&G). For years, the packaged goods giant has taken on more media duties and ramped up pressure on external partners to improve efficiency and reduce complexity. As of 2019, the company claimed to have in-housed about 30% of its media planning for an account that controls billions in spend. 

On earnings calls and at industry keynotes, P&G executives have repeatedly touted the benefits of its approach, stating its fabric care team saw $65 million in savings thanks to in-housing and investing more in proprietary algorithms. Forward-facing technology areas like artificial intelligence and data and analytics are joining conventional media tactics in the Cincinnati-based conglomerate’s playbook, forcing agencies to stay on the ball.

“More than ever, we need agency partners to see around corners,” said P&G’s brand chief Marc Pritchard at an Association of National Advertisers conference. “We’re finding that we can do more work in-house productively and we can strengthen agency partnerships at the same time to create more value.”

A new groundswell

P&G isn’t alone in stepping up in-housing efforts. Kraft Heinz has continued to grow an internal unit called The Kitchen that debuted in 2020 and focuses on data-driven social campaigns that try to latch onto cultural moments. The team has expanded beyond North America to eight international markets, including Europe, China and Brazil, according to Adweek.  

Of course, not every company is a P&G or a Kraft Heinz, which stand as some of the top advertisers in the world by media spend and own dozens of household brands. 

“They have so much money that they are able to take a long view other companies can't take,” said Petralia.

But broader changes in the marketing landscape are spurring a wide range of marketers to ponder the in-housing question more deeply. The need to acquire and securely manage first-party data is top of the agenda for many with the deprecation of third-party cookies slated for 2024. Similarly, tweaks to iOS have affected mobile strategies in substantive ways, not to mention a proliferation of budding platforms to master.

“If you want to know who or what is responsible for the focus on greater effectiveness, look to Apple, TikTok and any equivalent of the National Bureau of Economic Research,” said Greg Paull, principal at R3, over email. “The impact of privacy, content platforms and economic performance are what's driving marketers to explore how they can increase ownership, control and spend. It's a sign of the times.”

Several years of crises, pandemic-related and otherwise, have also made some companies desire more direct oversight in areas including diversity, equity and inclusion and corporate values messaging, according to Petralia.

“That is a big reason why people are in housing is to take control of their own strategies, to control their own destinies and to be able to ensure that they're able to deliver on the promises that they're making to shareholders and to others,” said Petralia. 

Point of differentiation

Given the nuances of marketing today, in-housing is manifesting in varied forms. Emerging channels like retail media have led some companies to in-house sales and operations, a possible sign the category is reaching fresh levels of maturity. Rounds of tech layoffs and changing labor dynamics are resulting in a potentially richer talent pool for marketers to pick from.  

Traditional marketing fields are also generating renewed in-housing activity. Norwegian Cruise Line in early 2023 introduced an in-house creative shop called Rebel Fish Creative Group. Audi unveiled Audi RED, or Rapid Experience Development, a North America-focused unit that aims to improve customer experience across the automaker’s digital touchpoints. Audi RED is a joint venture with agency Bimm.

“We're going to see a wave of in-housing fast followers this year. There are enough hybrid models and cases for marketers to confidently jump on the bandwagon,” said Paull. “The challenge will be finding a model that's right for the business.”

With more in-housing bets bubbling to the surface, the level of threat to third-party agencies is unclear. On the one hand, top-line agency performance has held steady and even defied expectations in the face of the pandemic, inflation and other volatility. New business wins jumped 11% for creative and media agencies globally in 2022, according to a R3 report. However, the value of that business dropped 35%, a sign that marketers are delegating potentially less significant work to external partners. Some large ad-holding groups have additionally given a cautious 2023 outlook despite otherwise healthy organic revenue growth. 

“Agencies don't have a claim on creativity or innovation,” said Paull. “Ways of working, flexibility, talent and performance count, and agencies will need to answer the fundamental questions of why them and at what price.”

On the other hand, the challenges facing both consumer and business-to-business marketers are steep — and may require a helping hand to navigate. In that respect, some experts believe the large agency networks are doing a better job at pitching their strengths. 

“They're leaning much more into what their differentiator is, which is we have global reach, we have access to data at a scale that you may not have,” said Petralia.

“That's not going to work with P&G, who has huge amounts of data,” he added. “But pretty much anybody smaller than that, many of these ad networks really do have a unique ability to understand what's going on in different customer segments.”

Anti-climatic could be one word used to describe Super Bowl LVII. Bracing on-field play between the Philadelphia Eagles and Kansas City Chiefs ended up hinging on a controversial holding call made with less than 2 minutes left on the clock, setting the Chiefs up for an easy victory. Ads similarly fizzled after weeks of build-up and even swirling controversy, with major teases from marketers like M&M’s failing to deliver on the hype.

A-list celebrity cameos and winks to pop culture staples like “Breaking Bad” and “Clueless” came to dominate the night. That’s not an uncommon occurrence for the big game, but the strategy has rarely felt so samey, meaning that even decent concepts got lost in the broader barrage of Hollywood faces. Meanwhile, the flops felt more grating than usual amid an over-reliance on one-note humor that failed to connect back to brand identity.

“It’s almost as if there was a shared brief style for the scripts,” said Pepe Aguilar, executive creative director at Gallegos United, over email.

There were still some surprises and clear winners regarding sentiment. Rihanna earned accolades for a high-flying halftime concert, the first to be sponsored by Apple Music. An interruptive spot for streamer Tubi had many watch parties wondering whether someone accidentally sat on the remote. Pets were effectively deployed by both Amazon and The Farmer’s Dog to tug at the heartstrings, with the latter topping USA Today’s closely watched Ad Meter.

QR codes and commercials for commerce-oriented services also continued to weave their way into the broadcast, speaking to enduring pandemic-driven digital trends. Electric vehicles were pervasive from automakers, charging up the usually staid category after a busy showing in 2022. Liquor had its first appearance, while Molson Coors made a splash in its first ad back at the Super Bowl in over three decades. And advertisers and the NFL made some strides in better recognizing women, including through a commercial from the league that saw flag football ambassador Diana Flores chased by an army of familiar faces.

Still, a handful of bright spots and innovative plays couldn’t stem the overriding feeling that Super Bowl LVII’s advertising slate was stale, a possible reflection of marketers being at an uneasy point of transition in relation to the pandemic, the rise of streaming and other seismic industry shifts.

“I found the majority of the ads to be particularly bad this year. Safe, lazy, boring,” said Douglas Brundage, founder of Kingsland, over email. “It seems as if brands are still figuring out what the national mood is and chose the most conservative routes possible instead of doing the deep strategy work to unlock an opportunity. I hate to see brands waste money like this.”

Celeb fatigue sets in

Heavy price tags for 2023 Super Bowl commercials probably signal that marketers will continue to rely on Hollywood talent to get the most bang for their buck. Fox, Super Bowl LVII’s broadcaster, reportedly commanded up to $7 million for 30 seconds of airtime. But the output of the big game had many commenters at their breaking point in terms of celebrity tolerance, meaning a switch-up in messaging should be in the cards lest people start to tune out.

Some ideas connected, like Bud Light’s grounded “Hold,” the first Super Bowl output from new creative agency Anomaly. The ad shows real-life couple Miles Teller and Keleigh Sperry inspired to goofily dance around their living room as catchy hold music enlivens an otherwise trying phone call.

“The ad was sweet and relatable and showed us that something as mundane as being on interminable hold can be made better with a cold beer,” said Deb Gabor, founder and CEO of Sol Marketing, in emailed comments.

Dunkin’ capitalized on Ben Affleck’s well-established — and much-memed — preference for the Massachusetts-based coffee chain in an ad directed by Affleck himself. He later reappeared to promote his new movie “Air.” In “Drive-Thru,” the filmmaker mans the busy ordering lane at a local Dunkin’ shop, eliciting baffled reactions from customers and, eventually, his wife, Jennifer Lopez. It was the rare instance of a brand drawing a clear connection between its product and the spokesperson in a night of disjointed partnerships.

“Ben’s famous love of Dunkin’ resonates here,” said Mark DiMassimo, founder and creative chief of DiGo, over email. “In a Super Bowl dominated by celebrity spots, this one transcended the cliches as well as the genre, and worked hard for Dunkin’.”

Elsewhere, usually likable personalities tested their appeal. Serena Williams showed up for not one, but two alcohol brands, stirring mixed responses. The tennis legend promoted both Michelob Ultra, following up on a 2022 campaign, and Rémy Martin, which took advantage of the NFL’s loosened rules around liquor advertising with a spot referencing Al Pacino’s speech from “Any Given Sunday.”

“[As] a huge tennis and Serena fan, I wish she hadn't been in two alcohol ads,” said Craig Brown, senior vice president of strategy at Incubeta, in an email. “I understand it's about money, but she is one of the truly inspirational people on the planet, and wish she'd chosen some different allegiances for the Super Bowl.”

A Hellmann’s ad punning on Jon Hamm and Brie Larson’s names also got a muted response and was perhaps the most emblematic of the night’s shoddy attempts at leveraging star power to make an impression.

“The joke writing was amateur, the insight was non-existent and the camera work was offensive,” said Myra Nussbaum, president and chief creative officer at Havas Chicago, over email. “Throwing Pete Davidson in took it down even another notch.”

Emotions, utility win the game

While celebrities proved to be less resonant than ever, two of the Super Bowl's best-performing ads delivered narrative-driven stories focused on man's best friend. DTC pet food brand The Farmer's Dog won the night — and the USA Today Ad Meter voting — with its first-ever national Super Bowl spot. The 60-second "Forever" follows a journey through all of life's milestones for a dog and its human.

"These 'as-time-goes-by' spots are very hard to execute. Casting and production design have to be perfect,” said Chris Corley, executive creative director at Dunn&Co, over email. “This spot has a lot of other things going for it as well. I love the editing and DP work. But even before all that, there was an amazing insight into people’s relationships with their dogs as their families grow."

Similar insights drove Amazon's "Saving Sawyer," a 90-second spot that followed a real-life rescue dog and his misadventures with his family. Full of nods to the early housebound pandemic period and the cautious return-to-office phase, the ad pulls at heartstrings by feinting toward the family giving up Sawyer before revealing the addition of another puppy.

"They were the only dot-com to make an emotional connection with viewers. In a few short, albeit expensive seconds, they perfectly captured the moment we’re living in, and the real reasons we buy the things we buy," said Steve Merino, chief creative director at Aloysius Butler & Clark, over email.

Beyond their canine creative, The Farmer's Dog and Amazon both tied their ads back to the utility of their brand, whether delivering healthy dog food or simplifying e-commerce. Several ads that weaved in the value propositions of their brands stuck out by staying true to marketing principles and not simply trying to generate buzz for buzz's sake.

"I noticed a stark contrast this year between brands that had a great strategy and those that had none,” said Mark Ray, co-founder and chief creative officer at North, over email. “Maybe because the world seems to have both shrunk and divided more in the last five years than the decades before, what it means to be a relevant, meaningful brand is evolving just as rapidly."

Google kept brand strategy at the forefront of its spot, delivering a 90-second product demo of its latest Pixel phone that "stayed laser-focused on core relevant differentiation" of its photo-fixing capabilities, according to Allen Adamson, co-founder of marketing collective Metaforce.

Apart from Google, automakers took the lead by combining strategy and execution. General Motors teamed with Netflix to continue its efforts to normalize EVs, while Kia turned a relatable moment — forgetting a child's favorite pacifier — into a hero's journey that only its latest SUV can solve. And Ram reminded ad makers and audiences that utility doesn't mean staid with its edgy "Premature Electrification" spot.

"It was a bold shift away from traditional car advertising. It worked because it built off a clear problem to solve — skepticism that electric vehicles can 'last long,'" said James Denman, head of innovation and marketing at Yard NYC, over email. "By then spoofing pharma commercials, it lands the joke and the benefit in a memorable way."

Do divisive spots start or end conversations?

To mix sports metaphors, Super Bowl ads are often about taking big swings that are as likely to end in a strikeout as a home run. As is often the case, many of the game's most discussed efforts were described by industry experts as both the best and worst of what advertisers had to offer — another test for brands on whether all engagement is created equal.

Super Bowl LVII’s most disruptive campaign was from Tubi, the free ad-supported streaming TV service owned by big-game broadcaster Fox. The company led countless viewers to a frenzied search for the remote with its 15-second "Interface Interruption" that overlaid the Tubi browsing experience on footage of two Fox sports announcers. It followed up the stunt with a bizarre 60-second spot that featured creepy, giant rabbits pushing unsuspecting folks into rabbit holes to invoke the "rabbit hole" of content in the streamer's library of channels.

While the "Rabbit Holes" spot was selected as the winner of the 2023 Super Clio, experts were mixed on the effort, applauding the show-stealing stunt but questioning whether the collection of ads clearly established Tubi or differentiated its brand from a host of similarly named streaming services. For others, the spot combining stunt and the surreal served its purpose.

"​​I was most surprised that the one streaming service I don’t already subscribe to had one of the best spots of the night," said Havas Chicago’s Nussbaum. "It got me to go to the site and find out that it’s an ad-supported free service, so I’ve already downloaded it on my devices and will be falling down the rabbit hole with Tubi."

In the weeks leading up to the big game, M&M's led industry watchers down a rabbit hole of its own, engaging in a confusing stunt about its spokescandies and a related rebrand that has proven polarizing. The campaign, which saw the candies take an "indefinite pause" while new spokesperson Maya Rudolph trotted out increasingly weird ideas for the brand, concluded at the Super Bowl.

A 30-second spot seemingly inspired by the hippie vibes of Coke’s “Hilltop” featured Rudolph, her clam-favored Ma&Ya's and a diverse cast of new spokespeople — a confusing watch for viewers who had not been following the saga before the game. The hiatus was then resolved, albeit awkwardly, with a 5-second bumper and a 15-second post-game spot that resembled a press conference. While some experts commended M&M's for trolling the conservatives who have attacked the rebrand for being "woke," others thought the execution failed to capitalize on pre-game buzz.

“I’m still not 100% sure what M&M's was trying to do,” said Aloysius Butler & Clark's Merino. “First, they caused a fake controversy by saying they were getting rid of their candy characters. Then, they made a joke about making the candy clam flavored. But in the end, they never revealed why they did any of the things they did.”

Perhaps the biggest surprise of Super Bowl LVII was that one of the buzziest efforts was focused on increasing cultural attention not for a brand, but for Jesus. As part of a multimillion-dollar effort, the He Gets Us campaign ran a 30-second spot, "Be Childlike," and a 60-second spot, "Love Your Enemies," that utilized black-and-white images of intense conflict. Some experts believed the emotional spots connected with audiences, no matter their religious affiliation, but others had issues with the campaign's backers and the decision to spend millions on a pricey rebrand for the Christian savior.

"The word spread online that the backers of this campaign included conservatives and anti-LGBTQ donors, reminding us all of the perennial split between Jesus the Brand, and many of his brand loyalists," said DiGo's DiMassimo. "However, few argued that the spots themselves got the brand wrong, and they resonated and stood above a commercial, celebrity-obsessed and mostly lazy Ad Bowl."

Stakeholders throughout the media-marketing ecosystem are moving pieces on the chessboard that is the future of video measurement. Four of the largest TV networks came together in January 2023 to form a committee focused on enabling multiple currencies and streaming measurement solutions — just days before the launch of Nielsen's long-awaited cross-platform measurement product, One Ads.

The moves, which followed smaller deals by ad-tech firms in the space, are the latest developments in the race to solve for cross-platform measurement in a fragmented media landscape that continues to be shaped by the growth of streaming. While the sands have been shifting for several years, 2023 could see the ad industry take major steps as it determines how to move on from the dominance of Nielsen, which is still reeling from an ongoing accreditation controversy.

"While it’s clear that Nielsen alone will no longer be the sole video measurement currency, it’s still unclear which of the many multiple currencies will eventually become part of a widely embraced industry toolkit," IAB CEO David Cohen said in emailed comments. "Expect greater clarity to come in 2023 as the results of numerous tests come to light. We believe the industry will settle on 2-3 primary providers."

Determining which offerings will rise as alternative currencies, how Nielsen's role will evolve and how the upfronts — when upcoming programming is presented to potential advertisers — will be affected are likely to be top-of-mind concerns for marketers going forward. For media buyers, changes could cause more headaches than they solve, but that’s not likely to stop the biggest media sellers from pushing for a scenario where they have more options and more negotiating power.

A Joint Industry Committee

The formation of the Joint Industry Committee by Fox, NBCUniversal, Paramount, TelevisaUnivision and Warner Bros. Discovery, along with OpenAP and the Video Advertising Bureau (VAB), represents a major step by the TV industry in 2023. In the works for some time, the JIC will work to enable multiple currencies and establish cross-platform measurement solutions for streaming video as it seeks to have solutions in place before the 2024 upfronts — work that can't happen if audience data remains completely siloed.

"You really need some of these common data sets available; you shouldn't have them locked up in any one party's hands [as] it creates bad dynamics," said Kevin Krim, CEO of EDO. "The innovation should happen on technology and data science, not on who owns the best proprietary data set, because that holds back the whole marketplace."

The formation of the JIC sees the traditional TV community coming together to reduce Nielsen's monopoly power. It replicates a European model that has set the standards for measurement methodology for years, and could boost competition and innovation in the space. If somewhat overdue, it is a natural evolution.

"The interests of the members are pretty well aligned," said Ashwin Navin, co-founder and CEO of Samba TV. "The companies participating in this right now have substantial presence in broadcast and cable [and] they need to make sure they've got a methodology that accurately counts those impressions and integrates them with their streaming impressions."

Absent from the JIC are companies that primarily focus on streaming, including Netflix, Amazon and, increasingly, Disney. As those platforms can grade their own homework and appoint their own measurement providers — as Disney has done with a number of providers and NBCU has done as well — innovation will look different than whatever the JIC settles on.

Streaming leader Netflix, which finally launched an ad-supported tier at the end of 2022, maintains that advertising could become at least 10% of its annual revenue. Likewise, GroupM's Business Intelligence team has suggested that the company could become a top 25 ad seller. As it prepares to take Paramount's spot at the 2023 upfronts, Netflix's expended deal with Nielsen could bolster the measurement company's bets around streaming, which include a deal with Amazon Prime Video over its game-changing "Thursday Night Football" broadcasts.

"The model that everyone aspires to, be it now or when they grow up, is Google's model, which basically has a vertical integration of audience, inventory and measurement," Navin explained. "Your biggest customers are going to demand third-party validation… so you need your own data and measurement methodology to tell your story and sell your product. You also reinforce that with third-party measurement from a best-of-breed group of providers."

Nielsen isn't going anywhere

No matter how successful the JIC is at coming together to make strides in measurement and alternative currencies, Nielsen is unlikely to lose its monopolistic position, at least in the next few years.

"Nielsen is not going anywhere, but there is massive competition and innovation in TV advertising measurement," said EDO's Krim. "Nielsen is incredibly deeply embedded in the buying and selling of TV advertising… those kinds of situations change very gradually."

Along with working to win back MRC accreditation, Nielsen in January 2023 also launched its cross-platform measurement product. The first piece of its Nielsen One framework, Nielsen One Ads seeks to offer a consistent and deduplicated view of ads across linear TV, connected TV (CTV), desktop and mobile. But no matter how effective its new offerings prove to be, the company's difficulties have given the industry a glimpse of a future where the company isn't as dominant.

"The industry over the last couple of years has decided that they don't want to have a monopoly commanding 3% of every transaction. So no matter how great it is, the headwinds for them are pretty significant," said Samba TV's Navin.

While media conglomerates and their partners focused on innovation tests in 2022, future efforts could see thousands of campaigns measured outside of the Nielsen currency, with NBCU and others scaling up their previous tests of various alternative measurement providers. Still, the formation of the JIC and an increase in alternative currency deals are not likely to have a real effect on transactions until 2024 — especially when one half of the business is not particularly concerned with Nielsen's difficulties and developments.

"The buy side is not particularly frustrated with Nielsen. Nielsen doesn't charge them as much as it charges the sell side, and there's a lot of simplicity for the buy side of having a single currency to look at," Krim explained. "A lot of these alternative currency players are pounding their chests and saying, 'We're going to take down the Nielsen hegemony' — on the buy side, it just will make their lives much more complicated."

In the end, alternative currencies and cross-platform measurement are the first step in providing advertisers a clearer picture of who is seeing their ads. The next step — determining which ad views turn into conversions and which drove brand outcomes — is of greater importance to marketers.

“Marketers have told us that they want (and need) to deeply understand the behavioral groups they’re reaching. They want outcomes married to currencies,” said Chris Kelly, CEO of brand analytics platform Upwave, in emailed comments. “All currency providers need to be prepared to tie their ratings to outcomes, because if not, nothing else matters.”

New business wins increased 11% for creative and media agencies globally in 2022, but the value of new business decreased by 35%, according to a report from consultancy R3 shared with Marketing Dive.

In the U.S., the value of new business in 2022 decreased by 42%. While IPG's R/GA, Publicis Groupe's Leo Burnett and WPP's VMLY&R led the ranks of U.S. creative agencies during the last month of the year, independents OKRP, Barkley and Zambezi joined the top 10 as CMOs sought "bold ideas that maximize value."

Globally, the shifts in new pitch wins and business value suggest that brands are looking to diversify services beyond traditional creative and media into e-commerce, data and performance marketing — areas that agency holding companies have invested heavily in.

The R3 New Business League report proclaims that "the AOR is dead" as creative and media are winning more pitches but for smaller values than in previous years. In addition, large advertisers are consolidating their marketing with ad holding groups that offer integrated services that are diversified beyond traditional creative and media.

"The future is in eCommerce, Data and Performance Marketing and agencies need to sell more advanced solutions to clients," Greg Paull, principal at R3, said in the report. "The biggest moves in 2022 have all been focused on the ability to serve the convergence of media, commerce, entertainment, and shopping."

Publicis Groupe topped R3's holding group ranking for the year with almost twice the estimated media revenue as second-place WPP, which was followed by Omnicom, IPG and Havas. Publicis' data-driven "Power of One" approach and integration with its Sapient and Epsilon acquisitions have been attractive to marketers. In December 2022, Publicis subsidiaries Starcom and Zenith topped R3's media agency rankings.

R3 attributed the decreased business value in the U.S. to economic uncertainty. Despite its restructuring, IPG's R/GA still won 53 pitches, besting Leo Burnett's 15 and VML&R's 28. OKRP, Barkley and Zambezi bested more established agencies by winning pitches for Burger King, Red Lobster and Under Armour, respectively. 

"Looking beyond the top three agencies on the Creative leaderboard, the rise of new guard independent agencies in the US suggests that CMOs are looking for bold ideas that maximize value," Paull said in the report. 

The need to maximize value was felt most acutely by QSR brands, five of which — Burger King, KFC, Jack in the Box, Dunkin’ and Costa — found new agency partners.

Three-quarters of executives at media agencies ranging in all sizes say overall advertiser spending will remain steady in 2023 while only 20% of respondents predict cutbacks, according to research conducted by connected insights company Pixability. 

Additionally, the survey found that the majority of respondents predict spend increases in certain channels including connected TV (CTV) and YouTube. Forty-one percent of respondents predict a drop in spend for linear TV ads. The survey also pointed to polarization regarding YouTube’s status. Fifty-seven percent of executives feel that YouTube is part of the CTV category, compared to 27% of respondents who feel the platform belongs in the social media category.

Despite a year of economic woes and changing consumer interests, agency executives largely believe that ad budgets will hold strong in 2023, though, that doesn't come without projected shifts in spend.

CTV and YouTube seem to be two points of potential, according to the survey, which questioned executives at nearly 200 U.S. media agencies. Seventy-six percent of advertisers predict an increase in spend on CTV, compared to 20% who believe spend on the channel will maintain current totals and 4% who predict a spending decrease. Regarding YouTube, 55% of agencies predict an increase in spend while 42% believe spending will maintain current totals and 3% foresee a decrease. 

“This data reflects what we’re hearing from our big customers,” said David George, CEO of Pixability, in a release. “While overall spending may be flat or even down in places, CTV spending will be increasing, and YouTube will be playing an increasingly important role in CTV plans.”

Executives seem to have found a point of contention regarding whether or not YouTube belongs in a social media category versus falling under CTV. Though a majority of executives (57%) feel YouTube belongs in the CTV category, only 39% of agencies have a team that plans CTV, YouTube and TV ads from a single unified group. However, 50% report they will have a group like that in the future. As felt by others in the industry, Linear TV is projected to see a spend decrease down the line. 

Pixability’s survey findings echo a projection from the IAB that CTV ad spending would increase by more than 14% in 2023. In addition, Magna Global in September 2022 predicted ad spending for video on demand (AVOD) was expected to increase by a third in 2023 to $6.3 billion, credited in part to new offerings from Netflix and Disney+.

Since that prediction, both of those services have launched their ad-supported tiers, with Disney promoting that its service had already attracted more than 100 blue-chip brands and partnerships from all of the major advertising holding companies, including Dentsu, Havas, Horizon, IPG, Omnicom, Publicis, RPA, Stagwell and WPP at the time of its December 2022 launch. Having launched its first ad-supported subscription tier in November 2022, Netflix is reportedly considering adding another level in the future.

As the first generation to grow up with the internet everywhere and easily at its fingertips, Gen Z lives in a world where even those with the most niche interests can find a like-minded tribe. Its members have matured with algorithms directing them to new hobby areas and online communities where they can find companionship and camaraderie. They seem to enjoy the variety, posing challenges to marketers accustomed to adopting broad-based demographic targeting strategies and narrow definitions of what’s moving culture.

“The algorithm is their gateway to the world,” said Maxine Gurevich, senior vice president of cultural intelligence at Why Group, a unit within the agency Horizon Media, of Gen Z. “They’re showing up on different channels and different places than other generations. They’re hard to pin down.”

In a 2022 report, titled “The Gen Z Field Guide: A Marketer’s Manual for Following the Niche Over the Norm,” Horizon Media identified five categories — and 12 subcultures within them — that have become critical to understanding and reaching this next generation of consumers. Among a cohort fragmented in its perspectives, the one thing they all seem to agree on is there’s no one theme uniting them. According to the research, 91% of 18- to 25-year-olds believe mainstream pop culture is a thing of the past.

As a result, successful marketing to Gen Z will not be about tapping into “the culture” in a traditional sense but rather addressing subcultures that address unique and personalized interests that can sometimes be at odds with each other.

“The trends are changing so often, there really isn’t a ‘mass culture’ anymore,” said Gurevich. “Subcultures are the new demographics as members of this generation connect and respond to the things they are most passionate about.”

Sorting through subcultures

The five major cultures identified by Horizon Media are gaming, entertainment, education, fashion and beauty. Within those categories, sub-segments range from “Gamer Girls” to “Scientific Edutainers” to “Cursed Cosplayers,” each with their own passion points and engagement tolerance. Reaching such hyper-specific consumers requires a level of nuance that hasn’t previously been marketing’s forte, according to Gurevich.

“You have to be deeply embedded in the culture. You can’t just open TikTok one day and know what will appeal to these consumers,” said Gurevich. “There’s a lot of noise, and Gen Z is looking for more intimate ways to connect. That’s how we have to approach these subcultures, by looking at the passion behind them.”

For instance, Gamer Girls are a subculture of 3.1 million female gamers who regularly show up to play in a traditionally male-dominated — and sometimes misogynist — gaming category. As a result, their subculture is passionate about diversity, equity and inclusion (DEI). Traditionally male-skewing brands with heavy gaming strategies can tap into these passions to reach Gamer Girls without necessarily alienating their core consumers.

Many esports and gaming deals as of late reflect the insight. Denny’s in August 2022 partnered with Complexity Gaming, the sister esports team of the Dallas Cowboys, on sponsored Twitch streams with a lineup of all-female creators to promote DEI. On the flip side of the coin, products historically marketed to women are taking their first steps into the gaming arena to connect with a similar audience.

With a successful campaign, a brand has the opportunity to reach other groups as Gamer Girls interact with various subcultures. Indeed, many Gen Zers find affinity with more than one subculture, presenting a chance for marketers to reach an entirely different cohort.

“They’re not mutually exclusive,” said Gurevich. “Just because we found someone in one subculture, doesn’t mean we won’t find them somewhere else. If you have an entry point into one subculture, you can use that to run alongside the other subcultures.”

Change ‘on steroids'

In order to do so, however, brands need to be authentic. They have to identify what they stand for and understand how those qualities might connect with subcultures. That doesn’t necessarily entail alienating consumers aligned on different ends of the spectrum.

“It is possible to be many things as a brand,” said Gurevich. “It’s not inauthentic to speak to different — even seemingly opposing — subcultures if a brand has a strong purpose.”

But the continued ability to reach these subcultures will require diligence and care. Marketers haven’t been in “set-it-and-forget-it” mode for many years now, but the rate of change among Gen Z is rapid and constant, requiring fluid media and creative strategies, per Gurevich.

“It’s on steroids,” said Gurevich. “You have to have a team constantly checking in on the subcultures regularly because they may not even be the same in a year. You have to stay on it.”