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Marketers saw the world open up again this year as the pandemic became endemic, and consumers began to travel, eat out and socialize again. Some things are forever changed, however, including a shift to prioritizing a better work-life balance and seeking more meaning in life as employees resigned en masse during the Great Resignation.
This shift didn’t only pertain to the world of work, but also has spilled over to consumers seeking more value and meaning in the experiences offered to them by marketers, especially as Gen Z grows older and wields more spending power.
As marketers prepare for 2023, what should they be aware of? Here are 4 key areas of note:
1. Build brand trust with Gen Z
A Bloomberg report from late 2021 reported Gen Z had around $360 billion in disposable income, more than double a 2018 estimate, and that spending power is only going to increase as more of the demographic comes of age and hits the workforce.
The best way marketers can build trust with this increasingly influential generation is by delivering products, experiences and content that speaks to their preferences and values.
Some 81% of Gen Z want personalized ads, compared to 57% of millennials and 43% of baby boomers, and the place they trust ads the most is Instagram, according to an Unsupervised study. Celebrity endorsements don’t appeal to this cohort, per the research. Rachel Kirsch, creative strategist at Unsupervised, explained to SmartBrief: “There’s been a shift in advertising to be more inclusive and more diverse to really connect with the modern consumer, and for many, celebrities are the antithesis of that.”
Brand inclusivity really matters to Gen Z, with 76% of the demographic reporting it’s a major factor when it comes to purchase decision-making on social media, according to Sprout Social.
And if you need more convincing, here’s what one Gen Zer told Forbes: “Brands can do at least two things to best engage Gen Z: reach them through social media and align with their progressive way of thinking.”
2. Stay aware of economic pressures on consumers
One area of marketing that’s recently become more important is providing value to consumers, as rising inflation bites and a potential recession looms on the horizon.
Thirty percent of US consumers currently feel pessimistic and think the long term economic outlook is gloomy, and that they could soon experience the worst recession of their lifetime, according to McKinsey. That’s the most pessimistic Americans have felt since the start of the pandemic.
Marketers can build trust with consumers worried about their personal finances with empathetic messaging and strategies such as promotions or discounts. Loyalty programs are also growing in popularity as a way for brands to add value, with 42% planning to add one this year and 26% citing first-party data as a major brand benefit, per this report from Oracle.
“The mindset of consumers is still very cautionary. Inflation is still going to be very top of mind for them,” says McKinsey partner Kelsey Robinson to Fortune of the coming months.
Marketers should track consumer sentiment going forward into next year and be ready to adapt messaging as the economic situation evolves.
3. Prepare for the metaverse
The metaverse may have been hyped for some time, but with advertising spend in the space set to reach between $144 billion and $206 billion by 2030, per McKinsey, it’s going to continue to be an area of interest for marketers next year.
Although the metaverse is yet to truly materialize, virtual gaming worlds are one way marketers can practice engaging and reaching consumers as they explore virtual identities and lives.
A recent report from Momentum Worldwide and the 4A’s called these gamers “the accidentals” – consumers playing games such as Fortnite, Roblox and Minecraft. Interestingly, the research found consumers who visited the metaverse felt more included there than in real life and also reported feeling significantly happier after their virtual experiences.
“With new options to decorate personal VR spaces, avatars and more, there will be an increased need to generate content for these experiences and allow users to build unique digital identities,” notes Adobe designer Brooke Hopper in a Fast Company article.
4. Engage with short-form video
Social media spend will comprise 18.1% of the average marketing budget by 2023, rising to 23.5% within five years, according to Deloitte’s 2022 CMO Survey.
Marketers are boosting investment in social media to reach consumers where they’re spending the most time, and the rise of TikTok has shown one sure way of capturing their attention – short-form video.
The popularity of this content format can be seen in the way other social platforms have shifted focus, from YouTube’s introduction of YouTube Shorts to Meta’s bet on Instagram Reels, even cutting its podcast and audio services and urging creators to focus on short-form video instead.
“The Reels campaigns that have been the most successful thus far are those that used creative that mirrors the aesthetic of TikTok’s UGC videos,” Andy Taylor, vice president, research at Tinuiti, told SmartBrief.
The most recent example of this shift to TikTok-style content is Amazon’s internal testing of an “Inspire” feed to display videos showcasing products, according to this Wall Street Journal report.
Marketers who consider these trends as they craft their overall strategies can begin 2023 prepared for whatever comes next in these unpredictable times.