Wunder Predicts 2023

WunderPredicts
Not your grandmother’s end-of-year trend report.
This is WunderPredicts. Mapping the soon-to-trend.
Here’s looking at you, 2023.

INTRODUCTION
MIRROR, MIRROR
X Lessons from Recessions Past
E #1 IN A RECESSION, MORE IS MORE
#2 THE UPSIDE TO A DOWNSWING
#3 BIG TECH’S RECKONING
IND #4 DON’T BE TARDY TO THE FIRST-PARTY
#5 DISCOVERABILITY IN THE ATTENTION RECESSION
#6 THE ADS CRYSTAL BALL
#7 THE AI GOLD RUSH
GROW BETTER WITH WUNDERKIND

Change is a constant -it’s the context within which brands are made, defined, and must grow. This has
never been more true than now –a statement made on the heels of constant, unprecedented, and
accelerated change -feels less philosophical and more tactical than it has in years past.
As we close the book on 2022, we thought it appropriate –even necessary –to make an educated bet
on the themes that will define 2023. If one lesson resonates from the last few years, it is that great
brands are born at the cusp of big inflection moments.And in what can often feel like a winner-take-
intro. all ecosystem, the need to get the foundations right cannot be over-emphasized.
Exceptional, era-defying brands have the “The four most dangerous words in
following in common – the English langauage -this time it’s
• Singular Vision–One north star. They rally different”
- Sir John Templeton
their entire organization across operations
toward a shared goal. In a turbulent environment with many shifting
• Agility –With a crystal clear direction in priorities, brands need to keep the above in
place, remaining nimble is of the utmost mind, and leverage the data they have on their
importance, both in terms of bringing customers to make informed, timely decisions.
newness to market, and pivoting messaging This helps them deliver resonant, richer
strategically in response to shifts in experiences that forge deeper consumer
customer feedback, attitudes, and relationships –in fact, CMOs citeconsumer
behaviors. expectations as the #1 driving force behind
brand strategy.
• Consumer at the Forefont –Finally, bringing With that in mind, let’s dive in on our bets for
consumers along with them on the journey 2023.
to create a holistic brand universe.

lessons from recessions past
mirror, mirror When considering how best to navigate
choppy economic waters, it’s helpful to
More volatile economic headwinds pose a challenge ahead of 2023. In a widen the lens and set context.
welcomed development, the rapid rise of inflation has finally halted. But the
recession remains a top-of-mind concern for marketers (83%), especially as
budgets are evaluated and set for the coming year.
“You never
want a serious
10% U.S. Consumer Price Index crisis to go to
Department of Labor waste”
8% - Rahm
Emanuel
6%
4%
respite
2% inflation begins descent
“In a recession, you must call into question
0% 0 0 0 0 1 1 1 1 2 2 2 2 everything you’ve done before”
2 2 2 2 2 2 2 2 2 2 2 2
/ / 1/ / 1/ 1/ / /
1/ 1 1 /1/ 1/ 1 7/ / 1/1/ 1 1 /1/
1/ 4/ 7/ 10 4/ 10 4/ 7/ 10 - Francois Henri-Pinault

“It’s only when the tide
Feature, Not a Bug Consumer Behavior Reinforced goes out that you realize
The SARs Outbreak (2000-04) catapultedChina who has been swimming
Since World War II, the US economy has faced naked.”
12recessions (averaging to an occurrence ahead of the rest of the world in digital adoption.
every ~6 years), each with its own unique After 2008, consumers lookedto e-commerce as - Warren Buffett
characteristics. Most relevant to recall are the a source of discovery, easy comparability, and a
21st century cases –the Dot-Com burst in path to finding deals and discounts. When we
2001 and the Great Recession of 2008. zoom-out, myths about e-commerce were
In fact, when President Trump took office in busted through these periods. For example, we
2017, he inherited the single longest, on- once believed instant gratification would be a
record, uninterrupted period of economic barrier to online migration. It was believed, for
expansion in US history, which came to an end example, that no one would buy clothes without
when COVID-19 disrupted the due course of touching and feeling them, and yet, apparel is
things. The pandemic in turn, became an now the #1 category purchased online –
accelerantfor e-commerceand digitization. consistently.
Through the anticipation of challenging times,
Conflict Fuels Innovation brands should be aware of structural changes in
their environment. Being canny enough to
The 2008 recession drovethe rise of the first recognize them and bold enough to invest
wave of direct-to-consumer all-stars, including accordingly is what separates changemakers
brands like Bonobos and Warby Parker, who from the rest. A silver bullet for success is
drove a new era of democratized, digital mythology –your consumer, market, and peer
narrative, influence, and a consolidation of set determine your trajectory.
growth on platforms like Facebook, Instagram,
and YouTube.

WunderPredicts
The Six Trends That Will Shape 2023

WunderPredicts #1
Brands will double-down on digital and tech investments to arm
themselves for higher stakes and saturation. While 50% of organizations
planto tighten belts, only 6% are going to be cutting back on tech/digital
–51% prioritizing it as an area of focus by upping investment. Managed 13%
services, in particular, will take precedence, as businesses outsource to 10%
specialists and focus on what they do best. 6% 7% 7% 7% 7% 7% 7% 8%
6% 6% 6% 5%
4% 5% 5%
This is noteworthy considering 1%
marketing spend is at its highest in 0% 0% 0%
decades. A new normal has Feb-12 Aug-13 Feb-15 Aug-16 Feb-18 Aug-19 Feb-21 Next 12m
reworked the baseline, with -4%
89% spend +12% vs. pre-pandemic
CMOs will increase levels. First-party data, channel
marketing budgets in 2023 marketing, social media, and other Marketing spend at its highest in
factors have driven these over a decade(Deloitte)
numbers up, as has the impact of
e-commerce acceleration.
In a Recession, More is More

Rec Wu #1
11:11
Notes Done
o n
Align your budget with m d
your strategic goals m e
If increasing retention and r
relevance, as well as safeguarding k
your organization from loss of end
market share is deemed important, i
then performance and digital n
marketing spend is key. d
s

WunderPredicts #2
Rumors of digital’s demise have been
The Upside to greatly exaggerated. While winners and
losers will certainly emerge from a tough
economic outlook, as is expected, e-
a Downswing commerce and digitization will not lose
favor with consumers.
The pandemic saw an unparalleled rise of e-
of consumers predict an commerce –both for consumers & organizations.
47% upswingin their volume of After record gains, a statistically normal
online shopping in 2023. normalization took place upon reopening (due to a
rebalancing with in-store activity), followed by
tightened pursestrings (inflation).
are purchasing at With that being said, while consumers will spend
comparable or higher more –they will undoubtedly also demand better.
77% levelsvs. a year ago. It’s imperative that you look at headlines through the
lens of your consumer. For example, while it’s true
that price increases are a pressure point for
think their personal consumers broadly, product quality still takes
finances will improve precedence over cost (53% vs. 36% in terms of
57% over the next six months. priority) and low-income consumers actually prefer
shopping online.

11:11 Rec Wu #2
Notes Done
Globally, online shopping o n
maintains relative stability m d
and has normalized. m e
Consumers are looking to r
prioritize where their hard-
earned cash is spent. Make end k
sure you capture a portion of i
that wallet share. n
s d

WunderPredicts#3
Big Tech’s $921.9b
Reckoning $272b
$63.1b
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Meta Market Cap YoY/Statista
After a decade of a near-static social media landscape, with Meta
running the show, the social media hierarchy has seen dramatic shifts
in the last few months, setting the stage for a different map come
2023.
Regulatorypressureshows no signs of loosening, after years of giving
Big Tech a long leash. Governments and agencies are looking to
mitigate monopolistic and dangerous practices, and Meta, Google,
Apple, etc. are on watch. With the Senate going to Democrats –the
party that has been most authoritative and prolificon antitrust
legislation – all bets are off.

WunderPredicts#3
The Goliath’s YouTube’s Midas
Fall from Grace Touch Falters
Meta is the worst performer of the S&P 500 this year Registering its first-ever revenue decline,
70% decline, as of October–a cool $100 billion of the social giant seemed to have largely
Zuck’s net worth evaporates. Zuck attributes troubles dodged the digital ad slowdown its
to Big Tech’s favorite bogeyman, Apple (claiming a competitors were hit with –until it didn’t.
$10 billion loss due to latter’s privacy changes). 11,000 YouTube’s Shorts, designed to combat
laid off as a result. Investors disagree; cooling the ascendancy of Bytedance’s TikTok
sentiment due to not being sold on the metaverse hasn’t made much of a splash. (We’re not
(Meta’s Reality Labs division is in the red to the tune of going to talk about Instagram Reels or
$9.4 billion, as of October). Twitter Fleets).

WunderPredicts#3
Snap reported its It’s TikTok’s world, Twitter’s Ad exodus
lowest quarterly and we are just Musk’s much-delayed
sales growth ever living in it acquisition was promptly
Video-based platforms In September, TikTok followed by a series of
fighting for a piece of the joined the rarified club of disastrous moves too long
pie in an increasingly the tech elite, hitting 1 to detail, including firing
crowded space. billion users. As nearly almost the entirety of the
every other major top brass, and approximate
platform races to mimic 80% of total staff. Failed
TikTok’s product and be a features and other gaffes
recipient of similar followed.
success, it was crowned This does not quite make
Amazon dropped the topgrossing app in for a stable advertiser draw.
out of the trillion 2022 (when combined Rather, unsurprisingly
dollar club with its Chinese market leading to an advertiser
twin) across iOS and exodus with no end in sight
And announced its own Android. It was also the as the platform teeters on
spate of 10k job cuts -its most popularapp for both the edge of a potential
largest in its operating millennials and Gen Z catastrophe.
history. in the US.

11:11 #3
Notes Done Recom Wu
Fortune favors the bold
–not merely the biggest n
Nothing screams change like the giants d
shaking in their boots. Brands must take
this moment to reevaluate their marketing e
budget mix –while search and social ad m
spend has its place and importance, it is r
increasingly clear that placing all your eggs k
in the FAANG basket is risky business and ends
brands must focus on shoring up their i
owned channels and data warehousing to n
truly compete in this new era.
d

WunderPredicts#4
WunderPredicts #4
8in10 7in10
Americans are troubled 73% expect brand
by brand’s usage of their communications tailored
personal data. Yet… to their preferences
Emailmarketing remainsthe dominant channel by
far, even as other channels grow (like text).
US Third-Party In light of cookie depreciation and the broader
Audience Data $12.3b $13.3b move toward first-party data, marketers are
Spending $11.9b predicting a continued rise in the number of
$9.7b $11.2b customer data sources, with an average of 18
projectedsources by 2023.
However, don’t let this paint an overly rosy picture
2017 2018 2019 2020 2021 –only 14% of brands achieve a true 360 degree
view of their customer.
Don’t be Tardy
to the First-Party

WunderPredicts #4
56% 54%
It should be jarring that 75% of brands 52% 51% 49%
say they still rely on third-party data, at
least in part – although 68% claim they
have at least defined a first-party
strategy to shift away from third-party
sources.
providing creating a creating investing reducing
information- first-party second-party in new internal data
sharing data data-sharing technologies siloes
incentives for strategy agreements
customers
Actions Taken by Marketers to
Prepare for a Cookieless Future
(Gartner)

11:11 #4
d s Notes Done
n d Consumers may claim to be alarmed
i n by the usage of their personal data,
k e meanwhile they expect and demand a
highly personalized and curated
r online experience when online
e m shopping. Allow customer identity
solutions to help fuel personalization
d strategies by empowering your
marketing teams to recognize
n om customers and understand their
Wu c wants and needs at every touchpoint.
Re

WunderPredicts #5
Not-So-Basic Basics 94%
of consumers report
Google Cloud’s retail customers registered more website traffic in the first six months of 2022 than receiving irrelevant results
all of 2019 combined. E-commerce and owned website e-commerce activity in particular, is red on retailer websites
hot. But getting the building blocks right is table stakes, and yet, it’s not a given, not even on brand (something brands are
websites. seemingly aware of) 88%
Product discovery on your website is not an arena within which you can afford to fumble and this of retailers report
pervasive error drives the surge in search abandonment(i.e., when a consumer searches for a search abndonment is a
product on a retailer’s website but doesn’t find what they’re looking for), costing retailers more than core issue they contend
with, and it costs them
$300 billion annuallyin the US alone. customer loyalty
of US consumers ditched their online shopping session because they
received irrelevant search results on a retailer’s website. More than half say Discoverability
94% they abandon their carts and shop elsewhere if there’s at least one item
they can’t find. in the Attention
Recession

WunderPredicts #5
$300b 64% High Risk,
lost each year from of US retail website High Reward
poor online search managers have no clear
experiences (US-only) plan for improvement
3 of 4 US consumers shop with brands that personalize
interactions and outreach to them and nearly 90% are loyalized
85% to brands that understand their interests. 77% of US consumers
avoid websites where they’ve experienced search difficulties
of global online and 75% say they are less loyal to a brand when it’s hard to find
consumers view a brand what they want on a website. 74% agree that if a company won’t
differently after an invest in improving its website, then they don’t want to give
unsuccessful search them their money. The numbers are even more dramatic globally
–for example, in the UK, 86% of consumers will stop
Data | Think with Google frequenting brands with underwhelming search and navigation.

WunderPredicts #5
Keep it Moving
YouTube Shorts hit 1.5 billion viewersper month and they TikTok captivated attention spans and wallet share in 2022,
view 30 billion Shorts a month. In November, YouTube and with nearly every major social platform copycatting
brought Shorts to its TV apps. TikTok’s product, short-form video is showing no indication
of slowing down.
140 billion Reels are Signal is the latest app Instagram Reels and YouTube Shortsare major focuses for
played daily, per Meta. to debut Stories.
their parent companies, as they face economic headwinds
and lose share to TikTok. 33% of marketers already invest in
Twitter is adding a TikTok rolls out its own short-form video content and one-third of those who don’t
TikTok-like discovery marketplace. The plan to do so in 2023.
capability. (Note -this average TikTok user
is pre-Elon so remains spends an average of For brands looking to incrementality test with short-form
to be seen). 24 hoursper month on video content, a potential area that has seen success across
the platform. retail formats is user-generated content spotlighted via
video, sometimes by white-labeling influencer content.

WunderPredicts #5
Social Commerce
Considering the souring sentiment toward Will Take Flight For instance, a consumer may discover a brand
spend from Meta & Co., heightened focus on on Instagram through a post from their favorite
brand websites and strategic shift of spend, we influencer, then navigate to the brand’s
predict that social platforms will step-up Instagram page to follow and browse products,
efforts for end-to-end shopping in-platform eventually checking out through Instagram’s
via social commerce. Source native shopping functionality.
Further, easing their reliance on third-party Following this, the consumer continues to stay
cookies is the only way to display verifiable within Instagram’s orbit, receiving personalized
analytics and underscore their value to brands. ads and relevant posts in their feeds that have
It worked in China, and we predict social US Retail Social $79.6b been selected by Instagram’s algorithm. The
platforms in the US are similarly going to go all- Commerce Sales $67.3b brand is nixed from the journey.
in (TikTok recently started piloting an Order $56.2b
Centerafter reversing its earlier position and
greenlighting LiveShopping in the US). $45.7b
$36.6b
The pivot from content to commerce has $27b
been strategic –Meta has been steering
Instagram’s positioning toward a marketplace As McKinsey notes –
model for years and 70% of consumers now “In e-commerce, brands should always
say they open the app with the intent to 2020 2021 2022 2023 2024 2025 direct consumers toward their own
discover or shop. Once the domain of Pinterest channels where they can develop a
alone, this is now a zone of opportunity for 3.4% 4.0% 4.4% 4.7% 5.0% 5.2% direct relationship with customers,
fledgling giants losing their shine. collect insights on customer behavior,
% of total retail sales and capture a higher share of
Brands investing in social commerce should be customer spend.”
cognizant of the risks. Social commerce is
changing the ideal brand-led purchase journey,
creating an experience that, in some cases,
circumvents brand-owned channels.

11:11 #5
d s Notes Done
n d Brand-led channels should be your
i n center of gravity when it comes to
k e the primary point of transaction
r and revenue. Utilize social
e m commerce for discovery and
acquisition. Who said you can’t
d have your cake and eat it too?
n om
Wu c
Re

WunderPredicts #6
+13%
20
Despite a rocky year for 21 $220b Spend grewby 37% last
some, the forecast is rosy year, but slowed in 2022 as
–digital ad spending will it normalizedfrom
hit $249 billion in the US 20 pandemic growth (similar
this year. 23 $249b to e-commerce).
Ad dollars are flowing resolutely to digital. In 2019, digital accounted for 56% of total US media ad
spend. This year, it will account for 72%. By 2026, digital ad spending will reach$386 billion and make
up 81% of total media ad spend.
Search Display
Within digital, search accounts for 41% of Within display, currently accounting for
The Ads total spend, a stronghold in display about half of digital ad spend, growth will
predicted to weakenover the next 2 free-fall from 38% to 9% by the end of
years, with growth projected to drop by this year as social media platforms lose
Crystal Ball more than half in the next year. their shine.

WunderPredicts #6
$6.2b
Applemadeits intentions $4.1b $5.1b
to bring ads deeper into its $3.1b
ecosystem (surfaced on $2.2b
the Podcasts, Maps, Books 39% 36%
apps) and we predict Big +26% 25%
Tech will likely maintain its 19%
onslaught of obstructionist
efforts to slow Apple’s
ascent in the ad space, 2020 2021 2022 2023 2024
especially as iOS market
share remains unthwarted Apple | US Ad Revenue (2020-24)
in the face of privacy
changes.
Retail Media will grow 41% of users do notwant
faster than other ad advertisers to track them via
channels, projections third-party cookies.
putting it in the same
ballpark as traditional TV in Beyond the first-party WunderKIND/Ads
an astonishing evolution of foundation that should be a
the space and reflection of given, contextualadvertising is
changed consumer a critical playing field for
behavior. investment in user experience-
focused advertising.
Data | Insider Intelligence

11:11 #6
d s Notes Done
n d With ad spend booming, make the
i n most of your ad strategy by
e diversifying how and when you reach
k your target audience. For brands who
r get in early, retail media solutions
e m offer an opportunity to reach a
highly-engaged niche of customer.
d For advertisers evaluating how best
n to target without third-party cookies,
om contextual ads allow you to reach
c users in relevant environments, at the
point in their journey they’re most
Wu Re willing to engage.

WunderPredicts #7
WunderPredicts #7
A WORD ON THE TECH HYPE CYCLE
“It has echoes of the early days of
crypto -genuine excitement about a
A new year, a new buzzword–captivating the investorcommunity, holding new, fascinating technology,
headlines in its thrall. Marketers are equal parts excited and worried. coupled with outrageous predictions
Previous hotly hyped luminaries including crypto, Web3, the Metaverse, etc.
are still in the rear window screen. But tech loves a hype cycle. By Fall of of transformative applications that
2022, NFTs were down 90%, the contagion of the cold crypto winter, and the betray a lack of understanding by
Metaverse was stillmore fantasy than reality. Best to look before you leap,
distinguishing the tactically usable innovations from the pie-in-the-sky (often non-technical) people about
futurism. what’s really going on.”
Seismic shifts in the tech product universe only become a reality when the - TYLER GRIFFIN, RESTIV VENTURES
innovation of tools is met with indisputable applications and user
excitement. Be wary of anything deemed to be civilization-upending or
offering 100x returns.
Analyzing the Case for AI

WunderPredicts #7
Generative AI Explained
Generative AI is best understood as an application of artificial intelligence that produces
unique text and imagery based on human prompts. You might recall late 2022’s
Lensa/DALL-E 2, Midjourney, andimage craze (everyone has a friend who got way too
into AI profile photos).
Show me the Money
Venture Capital is bullish on AI alone -$2 billionfor AI-focused startups poured in in 2022
alone (an eye-watering sum in a year that ended on a historical low for funding).
In 2022, Usage by
Businesses Doubled
58 Avg. number of use cases is 3.8 in 2022, up from 1.9 in
50 56 50 2020 –however, benchmarks are skewed by high-tech
47 industries and use cases remain largely pie-in-the-sky for
most brands’ tactical usage (e.g. –computer vision,
robotic automation at scale, etc.)
20 AI Adoption
2017 2018 2019 2020 2021 2022

WunderPredicts #7
2.22 1.23
In the War Room: A Feeding Frenzy
GOOG’s Top Brass At CES in January 2023, there were 2x
A “code red” meeting as panic ensued AI-categorizedexhibitors vs.
over search being displaced by fellow Metaverse (176),Crypto (19), +
goliath Microsoft. That said, the gains Blockchain (55) combined. Crypto and
are going to be in the Office suite AI have swapped places in search
business unit and lost share in paid interest in the last few months, per
advertising for Google is unlikely to Google Trends data. NFX’s open-
materialize for years. source spreadsheet lists 500+ startups
labeled“generative tech.”
11.22 2.22
ChatGPT launches, The Smartest AI is 1.23
breaks the Internet Dumb Without People Microsoft Makes Good
Valued at a cool ~$29 billion, OpenAI’s StackOverflow bans ChatGPT -it Microsoft invests$10 billion in
DALLE-E 2 has 1.5 million users cannot out-engineer engineers. In OpenAI (following Satya Nadella
creating 2 million images per day. 94% NYC, schoolsconsider bans as invested in OpenAI in 2019. “The
of leaders surveyed by Deloitte said plagiarism spikes. GettyImages and hottest deal in tech” is undoubtedly
AI was critical to their organizational anime conventions (bet you never going to give them an unparalleled
goals for the next 5 years. Yet, as thought you’d hear those two terms advantage vs. the rest of the
organizations implemented AI, results in the same sentence) ban it, while glitterati in the long-term. Rest easy
laggedexpectations. ArtStation’s showdown continues. and let the Titans duke this one out.

11:11 #7
d s Notes Done
d Chat GPT –
n n friend or foe?
i e In a recession, more is more, and marketers often
k need to work with less. In this case, we vote to
r accept the friend request, but enter the
relationship wisely. Leverage it to help with
e m automation, content creation, thought-starters,
market research, etc. -another support tool for
d your arsenal.
The Bottom Line -Generative AI's achievements,
n om built on the backs of 2+ decades of machine
learning research and development advances are
c undoubtedly impressive —but the tech world's
hype-bubble-to-bust cycle is swifter than ever,
Wu Re too. Proceed with caution.

While businesses are slated to double-down on digital and tech
investments, in tough times, few winners emerge. Fortune seems to
favor the boldest, not the biggest. But where risk is hefty, rewards are
super-sized.
Grow Marketers must predicate spend strategy on growth-first channels,
Better with rather than investing ever-more dollars into traditional paid channels
that are expensive, unreliable, and fail to drive commensurate growth.
Wunderkind Enter Wunderkind.
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generating revenue.
o Wunderkind provides one-to-one customer experiences at
unprecedented scale through channels that you own.
o With the uncertainty surrounding the current economic
environment, we offer performance guarantees that no other
market solution can match.

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