Opinion - Generation Media

An paceunprecedented of change

As the Digital marketplace continues to accelerate, with no signs of slowing down, Generation Media’s Emilie Flanders looks at key trends that marketers should be aware of.

2022 was the first year that the scales tipped in favour of Digital investment when it comes to Toys and Games UK ad spend. Fast forward to 2023, and the industry has fully embraced a digital-first approach, with an estimated twothirds of all ad spend allocated to digital platforms. So what have been some of the key trends, and what impact could they have as we look to 2024?

AI takes centre stage:

AI has formed the basis of Digital evolution in 2023 across all platforms. This has led to providers increasing their dependency on AI driven processes, such as Meta introducing updates to Meta Advantage which enable advertisers to more effectively A/B test through the use of different copies and placements via audience learning tools.

However, AI’s biggest impact in 2024 is likely to be the enhancement of image generation in the creation of advertising copy. Google has already introduced cutting-edge models into its workflow in 2023 which not only enhance results, but critically speed up asset management processes. We can expect these to be refined in 2024 and become more widespread and commercially affordable for advertisers to adopt.

As AI continues to advance, it will significantly impact the digital and creative sphere, revolutionizing how brands convey their messaging on various platforms. Let’s not forget that this is merely evolution, not revolution. After all, we’ve been using machine learning and AI modelling to inform planning and optimisation processes at Generation Media for the past few years via our Optimus AI suite of tools and will be looking to enhance these further in 2024 through the introduction of creative services.

YouTube Shorts overtakes TikTok:

Google has recently initiated ads across YouTube Shorts in its beta phase, marking a significant milestone since the feature's launch in 2020. It’s clear that YouTube is heavily promoting Shorts, with a series of recent announcements and features that include a $100m investment in original creator content. These moves underscore Google's heightened emphasis on bringing short-form content to the platform to retain and grow its younger audience from TikTok, offering a glimpse into the company's future direction.

Notably, 50% of the kids who tune into YouTube also use YouTube Shorts, and we expect these numbers to continue growing in 2024. Toy brands that experiment with Shorts therefore have the opportunity to leverage the momentum of this growth in viewership and YouTube’s own investments.

Creative best practices on Shorts are similar to TikTok and Reels, which will present a lower barrier to entry for brands already delivering strong results from short-form video on these platforms. Whilst this is still in Beta and not yet widely available, 2024 will see widespread use of Shorts advertising.

Rise of social commerce:

Social commerce, primarily led by TikTok, continued to grow this year. Renowned for its entertaining short-form content, TikTok has seamlessly integrated shopping features, transforming into a ‘shoppertainment’ hub. Aiming to achieve $20b in gross merchandise value by the year's end, TikTok's global impact is poised to quadruple from last year, as reported by Bloomberg.

TikTok data shows that 34% of parents want to see authentic, real-life opinions on the platform. Livestreams have become particularly popular as they offer parents a direct line to merchants and influencers, facilitating real-time conversations around the products they purchase for their children. The platforms native checkout functionality is also proving to be a gamechanger, promising favourable return on ad spend.

The e-commerce trend extends beyond just TikTok. Retail media will be a $140b global industry in 2024, with Amazon accounting for $53b of this, establishing itself at the top of the food chain. Social commerce, and Amazon’s DSP, means that retail media is becoming increasingly full funnel, showing the important of managing efforts at all stages of the funnel, compared to treating each in isolation.

Amazon will continue to embed itself at all stages of the consumer journey, having announced partnerships with Pinterest and, most significantly, Meta. Enabling users to link their Facebook and Instagram accounts to Amazon will create a full funnel loop for advertisers to tap into, generating more advanced data and metrics. And with Elon Musk’s background at PayPal, surely there are some announcements on the horizon with regard to transforming X into something more akin to the Chinese based WeChat and it’s multi use capabilities.

A positive shift in kids’ advertising experiences:

In March, Roblox announced it would hide advertisements from users aged 13 and under. Far from signalling a setback, this move has proven beneficial both ethically and strategically, fostering an ‘audience first’ environment where the most innovative creatives and user-first experiences thrive.

Brands have adapted by creating immersive worlds that allow children to explore products in a fun and organic way. Mattel, for example, partnered with Roblox on the Barbie Dreamhouse Tycoon experience, where players could create their very own Dreamhouse.

Sponsored live events have also become an avenue for brands to bring traffic to their online worlds. Collaborating with creators to host live events within these digital realms not only provides brands with exposure but also offers young players a unique opportunity to interact with their favourite creators. For kids, these streams are akin to playing with a celebrity, creating memorable experiences that form positive brand associations.

Data transformation creating parental targeting challenges:

Faced with mounting privacy concerns, the death of third-party cookies has long been on the cards, with Google aiming to end third party cookies in 2024.

Adding to this complexity, reaching parents with targeted data has encountered new challenges this year as social media platforms continue to remove interest-based targeting due to privacy concerns. Meta, specifically, faces imminent threats of a personalized advertising ban across the EU. This impending shift means advertisers may lose the ability to target based on interests and keywords, left with only basic profile targeting and diminished ASC (receiving solely platform signals). This means that niche, targeted audiences will be more difficult to reach.

For UK brands, staying prepared is crucial, given the potential extent of these changes to our digital landscape. Pivots towards engaging and innovative content are paramount, in the absence of detailed datadriven targeting options.

We look forward to embracing what 2024 has to offer as the evolution of Digital media extends far beyond the points raised above.