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Predictions 2023: The year ahead for media – by PHD MENA’s Daniel Shepherd

By Daniel Shepherd, regional head of strategy and product, PHD MENA

It is thought that the concept of new year’s resolutions first originated over 4,000 years ago, not too far away from here in Dubai. The ancient Babylonians – roughly in modern-day Iraq — are said to have made annual promises to their pagan gods. Keeping them meant that the gods bestowed all favours upon them, and letting them fall by the wayside resulted in being handed a tough punishment.

The origin of the annual prediction list in media land is much less clear. But it has certainly become a fixture, even usurping the humble resolution. So, in time-honoured tradition, it is time to dust off the crystal ball and consider the four main themes we will be resolving in the coming 12 months.

Rise of the robots – the impact of AI on our lives

AI has captivated the human imagination in fact and fiction for decades but 2023 really feels like the year it will have a profound impact on our daily lives. The reason behind this is its new accessibility; computers now speak the same language as us. More precisely, they speak our language, making it easier to converse and have AI computate on our behalf. No one has done more to make this a reality than Open AI, the open-source AI pioneers behind large language model (LLM)-based chatbot Chat GPT. But is it any good?

ChatGPT is a powerful language model that can generate human-like text. It has been trained on a large dataset of text and can understand and respond to a wide variety of prompts. However, like any machine-learning model, its performance can vary depending on the specific task and the quality of the input data. It’s best to evaluate the model on a specific task before making a judgement.

And these specific tasks are numerous – whether the task is creating imagery and video, engaging with voice-driven devices in a meaningful way or, closer to home, using platforms that do the computational dog work side of our jobs in a flash. Leaving us more time to do what we do best: be human.

Cost of loving crisis – can we afford the things we love?

The Collins Dictionary’s word of the year for 2022 was ‘permacrisis’, describing the feeling of living through a period of war, inflation and political instability. The effects and after-effects of the pandemic, wars in Ukraine and elsewhere and the accompanying political turmoil across much of the globe have left many countries with spiralling energy costs and inflation. Previous financial crises in the years 2001 and 2008 have led to the coining of the ‘lipstick effect’, the notion that people continue to reward themselves with treats that are valuable to themselves regardless of costs. While spending is considered and bargains sought, people will still make exceptions for something truly special.

The same goes for luxury goods. We saw during the pandemic that people are still prepared to find the money for the best of the best. People are prepared to make many sacrifices, but quality does not appear to be one of them.

Unfortunately, the planet might be. Data from audience research company GWI shows that while people continue to care deeply about the fate of the planet as it faces climate destruction, this does not always extend to making the sustainable choice with their consumption. It seems that in difficult times, this gets deprioritised.

So, when it comes to what consumers are prepared to spend their dwindling pay packets on, it turns out that luxury is sustainable but sustainability is a luxury.

Shattered screens – the fragmentation of viewership

As the proliferation of screens continues apace, it is no surprise that our audiences are becoming even more atomised and fragmented. Recessionary pressures have led OTT providers such as Netflix to experiment with ad-funded models, opening up these audiences to advertisers for the first time but splintering this already hard-to-reach cohort in the process.

It is difficult to say exactly what the impact of screen fragmentation on consumers will be in 2023, as it can depend on a variety of factors such as the types of devices and screens that are prevalent at the time as well as how developers choose to design and optimise their apps for different screen sizes and resolutions. Additionally, screen fragmentation can make it more difficult for businesses to create and deliver effective mobile advertising.

Big tech’s big hangover – is the party over?

The freezing global headwinds we discussed above had an arresting effect on tech stocks as a whole in 2022, but few felt the chill as much as Meta and Google. Indeed, Meta was the worst-performing stock in the S&P 500 last year. This was driven, in part, by the collapse of its digital ad-revenues as the combined total fell below 50 per cent of the total market for the first time since 2014. Still, managing nearly half of an estimated $320m global digital ad industry may not seem a catastrophe, you might think. But it is the trends that are alarming these companies and analysts alike. The rise of rivals like TikTok and Snap, tightening privacy laws and the imminent, albeit delayed, depreciation of the cookie as well as ongoing scepticism about Zuckerberg’s big bets in the metaverse mean the duopoly’s fortunes may not begin to thaw anytime soon. But brighter horizons beckon elsewhere. More diversity in the ecosystem means more investment in a wider range of players, global and local. This in turn will drive innovation, creativity and improved content and experiences for consumers and advertisers.

One of my personal resolutions for this year is a hardy perennial – to work smarter, not harder. It is early days, admittedly, but I am doing OK so far. Half of this article was written by ChatGPT, the AI chatbot from Open AI we mentioned earlier. We took it in turns for paragraphs. John Wanamaker, an early American retail magnate, is widely credited with the famous observation ‘I know half of my advertising money is wasted, I just don’t know which half.”

In much the same way, can you tell which half of this piece was written by a human and which half by a machine?