Observatory International Curated Newsletter – April 2023
New Financial Year New Goals
With a new financial year kicking off for many organisations in April, that often comes with a re-establishment of goals and objectives. To help with goal-setting and to align focus, McKinsey have examined what are six key priorities for CEOs in 2023.
The inclusion of ‘technology’ and ‘new business’ are to be expected, but some of the more interesting priorities include ‘resilience’ in an ever-changing, fast-paced world and ‘courage’ during times of uncertainty to make bold decisions, especially when warning indicators would suggest hesitancy and caution. Decisions around change and transformation are particularly hard to make but can reap reward if managed effectively.
Economic uncertainty continues to cast a shadow across the industry, with financial outlooks lacking in optimism. Such conditions usually manifest themselves in a reduction of investment in consumer spending, in client advertising investment and in industry progress.
One area that is seeing investment however, and which represents somewhat of a ‘renaissance’, is Marketing Mixed Modelling (MMM). Proving marketing effectiveness is once again a key focus and MMM offers the ability to measure all media channels in a privacy-focused way that aggregates data without the need for cookies or user-level data. Big tech companies such as Meta, Amazon and Google have all developed their own MMM offerings.
Having the right measurement frameworks and technologies in place to demonstrate marketing effectiveness will be vital in 2023.
There aren’t many hotter topics in the industry right now than Artificial Intelligence. OpenAI’s ChatGPT offering is leading the hype train, and there are many that see AI technology as being the most impactful influence on marketing over the next few years. Others see the rise of machines as a threat to human skills and, ultimately, jobs. Forbes has produced a concise overview on how AI could impact marketing.
What should always be considered when adopting new technologies are the potential risks involved. In March, many leading tech experts called for a halt on AI development, citing the “profound risks to society and humanity.” In the UK, the Institute of Practitioners in Advertising (IPA) have already debated AI’s threat to the ad industry.
Beyond the fears of a Terminator or Matrix-esque future, there are also key ethical concerns with AI. The fast progression of AI development is generating many questions around copyright, IP and diversity issues, most of which remain unanswered. For brands to apply this technology they must take heed of the risks involved and the potential for backlash.
Observatory International would always argue that technology is an enabler, and that for it to be truly effective it needs to be embedded within an organisational structure that has been designed to help an organisation achieve its objectives. Structure should follow strategy, so jumping on a new tech bandwagon purely because you can is not a recommended approach.
While AI is the current trending topic, the opposite is currently happening with the metaverse. For something that only a few months ago was said to be “too big to ignore” for marketers and business leaders, there has been a stark reduction in metaverse investment and promotion.
Mark Zuckerberg’s distancing of Meta from the metaverse was a warning signal – his eyes have now turned towards developing AI instead – as was the fact that Meta’s metaverse division, Reality Labs, lost over $10billion last year. User numbers continue to plummet also, highlighted by Decentraland’s ‘Metaverse Fashion Week’ attendance dropping by 76%year on year. NFT trading volumes are now in the $thousands where previously they were in the $millions.
Some big organisations such as Coke and Nike still remain positively resolute about the metaverse, however. Taking a look at what opportunities still remain for brands, the DRUM asks ‘Why are brands still investing in the metaverse?’
Global Marketer Week 2023
We’re looking forward to attending the WFA’s Global Marketer Week 2023 in Istanbul, April 25th – 28th. Hope to see you there. Our Managing Partners Lucinda Peniston-Baines and Stuart Pocock will be hosting the Sourcing Forum on Wednesday 26th, focused on driving sustainable growth through strong and long-lasting external partnerships.