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The world economy faces several new challenges in 2023. What to expect from 2024? The main risks could be high interest rates, slowing economic growth in the major Western economies and China, and geopolitical events around the world, from the Middle East to the Far East.

The world economy in 2023 faced several new challenges at once. One of the main surprises was the situation around the Chinese economy: back at the beginning of the year, the markets had expected its rapid recovery after the removal of severe pandemic restrictions, but it turned out to be the opposite. Domestic demand, which was expected to be the main driver of recovery, grew much slower than expected, exports and imports declined for most of the year, and youth unemployment rose to a record high above 20%.

The European economy stagnated for most of the year, with Eurozone GDP contracting by 0.1% in Q3 2023. The U.S. economy, contrary to expectations, grew steadily in 2023. If at the beginning of the year, after a series of bankruptcies of large U.S. banks, the most likely scenario was recession, by the end of the year the markets became full of optimism. In the third quarter, the US economy grew by 4.9% – the highest since the end of 2021.

High stakes in the West

One of the main risks for the world economy in 2024 is a continued slowdown in global growth. While in 2000-2019 the average annual growth of the global economy was 3.8%, in 2023-2024 it is significantly lower – 3% and 2.9% according to the IMF baseline forecast. According to Fitch’s forecast, the slowdown will be sharper – from 2.9% in 2023 to 2.1% in 2024. The reason for the slowdown in the leading economies will be, among other things, the high level of interest rates. Western regulators conducted a cycle of monetary tightening in 2022-2023, with rates in the US and EU rising to their highest levels since the early 2000s. The world’s largest economy, the U.S., will grow more slowly due to slower household income growth and lower activity in lending and investment, Fitch said. The agency forecasts that US GDP will grow at an annualized rate of 1.2% in 2024, well below the projected 2.9% in 2023.

The world’s largest economies will nevertheless manage to avoid recession next year in the baseline scenario, Goldman Sachs believes. Jan Hatzius, Chief Economist at Goldman Sachs Research, highlights several reasons for optimism. First, real income growth in both the US and the Eurozone will be sufficient to support domestic demand and GDP growth of at least 2% by the end of the year. Second, while higher rates will continue to weigh on economic growth, the worst is over. Goldman Sachs calculates that the maximum impact of monetary tightening on GDP growth occurs over two quarters, so the slowdown in Western economies from worsened credit conditions will be less in 2024 than in 2023. Finally, according to Goldman Sachs analysis, when inflation falls below 3%, central banks are twice as likely to cut rates if there is a risk of recession than when inflation is above 5%. Annual inflation in the U.S. reached 3.1% at the end of November, while in the eurozone it reached 2.4%. If inflation continues on a downward trajectory, central banks in Europe and the U.S. will be able to start reducing interest rates in the second half of 2024, which will improve the prospects for economic growth, Morgan Stanley predicts.

However, the optimistic forecasts are primarily based on the fact that inflation will continue to fall and move towards the 2% target for the US and the eurozone. But there is a moderate risk that inflation will accelerate again in 2024, warns The Economist Intelligence Unit (EIU). Inflation could be pushed up by tight labor markets and rising commodity prices due to supply shortages. This could prompt global central banks to continue tightening policy, which in turn would reduce consumer and investment demand. In emerging markets, higher rates could cause sharp currency depreciation, which would further increase inflation and curb economic growth, the EIU explains. Inflation can be volatile even after peaks are reached, points out US financial services firm Charles Schwab. The company refers to events in 1970, when US inflation after peaking was unable to reach the 2% target for a long time, forcing the Fed to retaliate. “It is not certain that inflation can quickly return to the 2% target in 2024. Problems could emerge due to tight global labor markets, volatile energy prices and supply chain issues,” Charles Schwab suggests.

Slow growth in the East

While inflation rates will be important for economic dynamics in developed Western countries, for the world’s second economy, China’s, the risks lie on the opposite side – deflationary. The decline in domestic demand is largely due to a chronic crisis in China’s real estate market, which accounts for 15% to 30% of the country’s GDP, Morningstar notes. Real estate sales are expected to continue to decline in 2024, putting pressure on developers’ liquidity, says Freedom Finance Global analyst Alina Poptsova. “S&P Global Ratings forecasts that under a negative scenario, sales could fall to around CNY10 trillion. This would bring the sector’s activity back to the levels seen in 2015,” she notes.

Against the backdrop of slowing economic growth, China is increasingly being compared to Japan’s economy, which once faced the so-called “lost decades” due to lower domestic demand and deflation. Goldman Sachs forecasts that China’s GDP growth will slow to 4.8 percent in 2024. “Economic weakness could still be a problem in 2024 for China. If the Chinese economy stagnates or recessionary for a long time, it will also affect the country’s trading partners (Southeast Asian countries, the European Union), which could then also face an economic slowdown,” Morningstar warned.

The economic pessimism of the Chinese population is also expressed in the consumer confidence (consumer optimism) index maintained by the National Bureau of Statistics of the People’s Republic of China – in 2023, the index was at its lowest level in 25 years. To remedy the situation, the government decided to pursue a stimulating policy – to invest in infrastructure and support the real estate sector. Despite this, it is excessive government intervention to solve the problems of economic growth may carry additional risks, notes the EIU. Using “helicopter money” to stimulate demand, lifting restrictions on buying homes in major Chinese cities and helping real estate developers – all this could create another bubble in the market. In addition, it could narrow the space for private capital and lead to greater government intervention in the economy, EIU experts warn.

Political risks around the world

But geopolitics seems to be the main macroeconomic risk in 2024. At least, it is geopolitics that the participants of a large-scale survey of 500 institutional investors conducted by Natixis consider to be the main danger. In 2024, elections, parliamentary or presidential, will be held in more than 50 countries. In particular, U.S. presidential elections are scheduled for the fall of 2024. The country is in a unique situation right now: according to a recent poll from Gallup, about 63% of U.S. adults believe that the Republican and Democratic parties are “doing so poorly” that “a third major party is needed.” That’s the highest number in this poll since Gallup first began conducting it in 2023.

The outcome of the US elections will determine the contours of the future policy of the world’s largest and most influential economy for the next four years, says Olga Belenkaya, Head of Macroeconomic Analysis at Finam. Especially “risky” can be a transitional moment, when a new president has already been elected, but power has not yet been transferred to him – then the opponents of the United States often dare to take actions contrary to American interests, say analysts Charles Schwab. Other important elections will be held in January – Taiwan will elect a president. The main struggle will be between candidates from the ruling Democratic Progressive Party and the opposition Kuomintang Party, which favors rapprochement with mainland China. “This is important, first of all, in the context of Beijing’s hopes for peaceful reunification with Taiwan or a possible escalation of the confrontation, in which China may try to resolve the situation through a forceful seizure of power in Taiwan or a military blockade,” notes Olga Belenkaya.

It is the intensification of contradictions between China and the US that was most noticeable at the end of 2023, Deutsche Bank analysts note. They expect the strategic rivalry between the two countries, which has already led to a number of negative consequences for their trade relations, to intensify in 2024. In addition, risks remain that current conflicts – for example in Ukraine and Gaza – will encompass a wider range of actors on a regional or global level, the EIU points out.

Political risks are perhaps the most important, says Valery Emelyanov, a stock market expert at BKS Investment World. “Since they cannot be modeled, they cannot be hedged. This is the human factor in its purest form: no one knows how politicians will behave next year, not even these politicians themselves. Social problems are equally unpredictable. It is impossible to say in advance when and where they will turn into protests or even a whole war, as it happened in Gaza,” the expert concludes.

Let’s take a look at the most significant trends that will dominate the marketing industry in 2024.

Rapidly evolving technology and the digital management and marketing trends it sets are now a key factor in the success of any business’s marketing strategy. Change is happening so fast that it is important for companies to keep their finger on the pulse, adapt to change and find effective solutions.

In this article, let’s take a look at the most significant trends that will dominate the marketing landscape in 2024. Let’s explore together what the future holds for marketing and what strategies can help businesses succeed in an ever-changing media environment and consumer demands. So, let’s embark on an exciting journey through the marketing world of 2024. Welcome to the changing world of the digital age!

An overview of digital-related changes in marketing

Before we open the door to 2024 and talk about trends and changes, let’s take a look back at what digital technologies have brought to marketing over the past few years. After all, they haven’t just overturned traditional approaches, but have also opened up new opportunities to engage with consumers. Let’s first take a look at the key changes that have had the biggest impact on the marketing function of companies and made us talk about the digitalization of everything and anything in business.

First of all, the emergence of social media has opened up a huge space for interaction with consumers, as well as the opportunity to explore interests and behaviors in greater depth. It is with the emergence of these communication platforms on the Internet that marketers were given the opportunity to create and target their targeted messages to specific groups of users based on their interests, needs and behavioral information.

The development of smartphones, tablets and other gadgets has given marketers a different quality of interaction with consumers. Mobile applications, messengers and geolocation advertising have opened up opportunities for closer contact with the target audience and prompt response to their requests. Gadgets have changed the game in the field of goods and services promotion, moving the lion’s share of marketing communications to the digital space from traditional media channels.

Collecting and analyzing large amounts of data has become an important part of companies’ marketing strategies. Analytics and forecasting are now a reliable pillar in designing marketing campaigns as well as in developing new offerings. It was big data that became the turning point when companies turned fully towards customers and started to build their activities around their consumers. Customer-centricity has become one of the key criteria for not only the marketing function, but the entire enterprise.

The saturation of digital space with advertising messages led to the search for new effective ways that can reach the target audience, despite its information overload. This is how PR-communications transformed into influence marketing. Cooperation with bloggers and Influencers allows companies to use their influence and trust of subscribers, effectively advertise their products and services, as well as increase brand awareness.

Virtual and augmented reality technologies have enabled the creation of immersive, interactive spaces where consumers can immerse themselves in the world of a product or service. And at the intersection of digital and physical space, marketers have begun to create a new fijital space to provide new customer experiences for target audiences.

One of the recent innovations in marketing is process automation using artificial intelligence, which helps marketers deal with large amounts of data and increase the speed of task processing and productivity of the marketing function in resource-constrained organizational environments.

These are the major, if not revolutionary, factors among the many changes that digital technology has brought to marketing. Of course, the evolutionary process has not ended here and it will continue, requiring marketers to adapt and constantly develop new strategies. To remain successful in the market, it is important to keep up with new technologies and know the digital marketing trends to digitize your marketing processes.

Trends

Predicting future marketing trends is not an easy task, as internet technology is constantly evolving and consumer behavior is changing rapidly. However, digital marketing trends 2023 give an opportunity to suggest what will develop and influence in 2024. So, what marketers should pay attention to.

1. Undoubtedly, the introduction and use of artificial intelligence in companies, including in marketing tasks will only increase and become more widespread. Companies will more actively and boldly apply AI to analyze data, create content, improve customer experience and optimize advertising campaigns.
2. Videos continue to be one of the most popular types of content and effective promotional tools, especially among younger audiences. In 2024, we should expect to see heavy use of video marketing in advertising campaigns, especially short formats of videos in the form of storis and shorts.
3. Influencers gained momentum throughout the past 2023, increasing their share in many companies’ marketing communications, and this marketing trend will be no less relevant in 2024. Bloggers with different sized audiences will be in demand among advertisers, despite the complexities of applying the law on ad labeling.
4. The widespread use of voice interfaces and devices makes relevant search more popular and more in demand among users. In 2024, we should expect to see more interest from marketers in using voice search and optimizing content for this format.
5. The trend of using marketplaces as a media platform was noticeable in 2023. It will continue to develop in 2024 and will become more widespread among companies, especially those operating in the consumer segment. More and more often when searching for goods, users turn directly to online retailers, bypassing search resources. In addition, marketplaces are responding to these trends and expanding their promotional tools.
6. In the field of search engine optimization (SEO), the focus has shifted decisively to achieving “position zero” on search engine results pages. Selected snippets, which often occupy the top spot in search results, will be a key goal for marketers in 2024 in this area of digital marketing. It not only increases site visibility and traffic, but also increases user engagement. Hence, optimizing select snippets helps establish a brand as a trusted source of information.
7. Consumer engagement will move more actively into mobile applications. Companies will expand their functionality in an effort to improve their customers’ user experience and offer personalized content, offers and promotions.

Anticipated changes and predictions for the future of marketing in the digital age

Unfortunately, we must recognize that the most probable change in 2024 for marketing and business in general is an increase in unpredictability in the markets. The forecast for instability of the market situation is dictated, first of all, by political tension in the world, which may develop due to elections in a number of developed countries of the world, including those involved in confrontation with Russia. Companies will have to constantly choose between promotion and the need to pause when silence is golden. In such an environment, brand trust will be at the center of consumer attention, against the backdrop of the serious nature of much of the content available.

Marketers will return to branding techniques and building brand awareness, as the product shelf in many categories has been significantly refreshed over the past two years. While data-driven performance marketing will continue to drive sales for companies, it will also be critical for consumers to receive not only a presentation of new brands, but also to hear the updated strategy of brands well known in the marketplace.

A trend that will be impossible for brands to ignore is consumers’ demand for tangible experiences. The interest in outdoor and TV advertising past 2023, coupled with post-pandemic digital fatigue, confirms the demand from the target audience for offline interactions. Branded events will play an important role in marketing strategy, helping to build deeper connections with consumers and generate memorable moments.

Recent new brands will continue to generate a lot of interest from consumer audiences, pulling attention away from large established brands. After all, the past year 2023 has already shown that not only do consumers now prefer to choose among domestic brands, but they are also definitely gravitating towards the products of smaller companies to the detriment of large global brands.

Microbrands, which are actively saturating the offer on marketplaces, are throwing “wood into the furnace”. New companies are taking advantage of the current circumstances following the departure of a number of international brands and are seeking to challenge established concepts, perceptions and consumer needs. They are actively competing for the hearts and minds of consumers by switching them away from familiar brands. In 2024, microbrands will continue to capitalize on the growing user interest in marketplaces and succeed with their single-minded focus on capturing niches in ecommerce, leveraging social platforms and influencers.

Nvidia could overtake Apple in market capitalization if Apple doesn’t launch its AI this year.

Apple is now worth $2.63 trillion versus Nvidia’s $2.15 trillion and Microsoft’s $2.99 ​​trillion. At the same time, Nvidia shares have approximately quadrupled in price over the year, while Apple shares have only grown by 15–20% over the same period.

In addition to AI, the EU is putting pressure on Apple because of its monopoly in the application store, Apple takes the lion’s share of its income from developers who pay it about 30% for all in-game purchases and subscriptions, as well as a drop in sales forecasts for the iPhone from 220 million to 200 million units , what is important here is not so much the numbers, but the dynamics, because literally just recently Huawei smartphones overtook the iPhone in sales in the Chinese market, but in terms of dynamics, Apple smartphones fell in sales by 24% and Huawei soared by 64%.

While Apple is thinking about what AI is, on March 18 Nvidia will hold the “NVIDIA GTC AI 2024” event, where it will show its new technologies and the gap could become even greater, the market has already won back this event, but Apple is not doing well at all.