Forrester 2023 predictions: Marketers expected to overcorrect to performance marketing again

A doubling down on growth in 2023 in the face of tough economic conditions could result in too many marketing leaders trying to rack up quick performance hits at the expense of building brand equity, Forrester warns.

The analyst firm made the prediction as part of its annual Predictions series, released last week and encompassing a range of marketing, CX and broader market forecasts for 2023.

When it comes to B2C marketing, Forrester said it’s expecting market volatility in 2023 to force marketers to play it safe. As a result, it’s predicting CMOs will ‘overcorrect’, diverting test-and-learn budgets focused on improving brand experiences to performance media channels. At the same time, martech costs are expected to go up, taking up more of the budget.  

In its B2C marketing predictions, Forrester said it expected marketers to be paying up to 20 per cent more for martech in 2023, a direct consequence of increased costs, fundraising struggles and intensifying competition across the marketing technology lumascape.

“Martech vendors across categories will scramble to differentiate — whether through focused functionality such as a customer data platform, mobile-specific solutions, or industry concentration like hospitality or healthcare,” the analyst firm continued. “Vendors in the enterprise marketing suite category are already breaking into specialised segments. With fewer vendors attempting to meet [and message] end-to-end marketing needs, marketers will have an easier time matching solutions to their capability gaps.

“But this comes at a cost: For most buyers, rising licensing fees, a fragmented vendor ecosystem, and more integrations will equate to higher martech expenditures.”

While higher costs are one outcome of a volatile market, another is politics. The analyst group is predicting political as well as economic volatility could see marketers playing down brand values, again in the name of playing it safe.

For Forrester, a shift to ‘anti-woke’ political platforms in the US, as well as crackdowns in the EU around political advertising, could inadvertently impact marketing communications. As a result, it’s predicting most mainstream brands will retreat from public political stances.

“While brands won’t abandon acting on their values, they will be more subtle about it — gone will be the days of vacuous virtue signalling,” Forrester B2C marketing predictions authors, Mike Proulx and Emily Collins, stated. “Procter & Gamble already transposed its marketing purpose statement from ‘Force for Good. Force for Growth’ to ‘Force for Growth. Force for Good’.”  

Metaverse enthusiasm wanes

In addition, Forrester expected brands to step back from the metaverse in favour of more tried and tested channels. For those who do push ahead in the metaverse, the analyst firm expected a pivot away from brand experimentation and superficial ‘one and done’ headline-grabbers towards efforts delivering employee and consumer utility.

“Expect a sober 2023, where the industry focuses on function over form to prove the metaverse’s value to a sceptical potential customer base,” Forrester stated in a second 2023 predictions report on the metaverse and NFTs.

Forrester has already suggested the ‘metaverse’ in its true form doesn’t yet exist. Instead, the analyst firm has claimed what currently exists in market are ‘metaverse precursors’, or standalone immersive platforms.

“The as-yet non-existent metaverse became the ‘next big thing’ in 2021 and 2022. But the end of lockdowns outside of China has reduced consumers’ appetite for spending time in online spaces, and economic headwinds have already exposed the vulnerabilities of a supposed experience revolution that has yet to garner mass consumer interest,” Forrester stated in its Predictions 2023 report.

For example, job ads with ‘metaverse’ in the description between April and June 2022 dropped by 81 per cent. Exacerbating the issue is the fact metaverse players haven’t yet agreed on standards. Despite the Metaverse Standards Forum asking 1500-plus member organisations to vote on what to prioritise in terms of standardisation, none will see a viable standard emerge in 2023 due to a ‘spinternet’ of competing approaches.

“This will inhibit growth,” Forrester stated. “As a result, brands that do want to experiment will lean into large, single platforms such as Meta’s Horizon Worlds or Roblox that offer audience scale and interoperability within their platforms

“As economies slow further in 2023, irrational metaverse exuberance will give way to a focus on core infrastructure, overdue product features, and improving immersive experiences on existing platforms, which will lay the groundwork for the future metaverse.”

Don’t miss out on the wealth of insight and content provided by CMO A/NZ and sign up to our weekly CMO Digest newsletters and information services here.  

You can also follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page