Since this blog post was published, Google has announced that it is pushing back the final deadline for its phasing out of third-party cookies to late-2023.
Predicting the future feels particularly daunting after the year we just had. However, we didn’t do too badly (setting aside the minor oversight of not predicting Covid) with Advertising Trends in 2020: Our Predictions 12 months ago, so here goes.
Advertising Trends in 2021: Our Predictions
Continued Covid Reverberations
Federal Reserve chairman Jerome Powell reportedly said, “We’re not going back to the same economy—we’re recovering, but to a different economy.” Which of the pandemic megatrends (ecommerce, staying in, gardening, DIY, pets, WFH) stick is still TBC, but it’s virtually guaranteed that 2021 will be a pivotal year across multiple industries.
An Ad Market Rollercoaster
After crashing last March/April, UK media markets recovered across the summer and are now largely recovered (with the significant exception of travel) with overall media spend only -4% for 2020 versus 2019 and digital spend finishing 2020 +4.9%, according to Group M.
This digital growth has been driven by eCommerce advertisers whose digital spends are up 50% YoY and are forecast to be up a stonking 66% next year - broadly the same growth trajectory without the Mar-May 2020 Covid hit.
This growth may look huge, but when you consider eCommerce orders are up +100% YoY in the UK and US, the 50% ad investment growth in 2020 starts to look almost behind the curve – hence the 66% increase forecast for 2021 increase.
2021, pandemics permitting - and we’re still far from out of the woods - is likely see sustained digital ad investment growth with ecommerce continuing to build and the travel market gradually coming back.
Advertising on eCommerce Platforms
Ad spend is following shoppers. Not just in a general growth of eCommerce advertising, but also with a boom in advertising on ecommerce platforms.
As Amazon, Walmart and other players have attracted more shoppers, they’ve also grown their ad sale businesses. According to eMarketer, advertising on ecommerce platforms jumped 39% in 2020 and will grow another 30% in 2021, capturing 13% of total U.S. digital ad spend.
The bulk of this is Amazon. In 2021 we are going to see huge growth in both advertising on the Amazon-owned platforms, as well as off-platform using their shopping data powered DSP. Think about browsing Amazon for a new lawnmower in the morning and then miraculously seeing lawnmower ads in the pre-roll for a show on Amazon Prime and on Guardian.com that evening.
The End of the Cookie
Google Chrome will stop supporting third-party cookies by early 2022, altering how digital ads are targeted and tracked, so there needs to be advance focus on this and effectiveness measurement. Invites to seminars on effective use of 1st party data are going flood inboxes in 2021…
AI-Driven Ad Creation
The pandemic forced brands to slash creative budgets and social distancing made complex ad shoots impossible. With the drive for performance advertising still strong, brands and media owners increased their usage of the AI-driven creative options the tech media owners now all provide.
Expect video equivalents to appear in 2021. Google has long seen the cost and complexity of video ad production as a blocker to YouTube media investment and has several AI driven solutions in advanced BETA. Creative Directors in ad agencies might hate these tools but Marketing Directors and performance media buyers who want to get effective ads live fast disagree.
A Focus On The Mid-Funnel
Media owners will continue to expand mid-funnel offerings to deliver broader reach and more effectively drive conversion for performance advertisers. These mid-funnel, often AI driven, display offerings are filling the chasm between search at the bottom of funnel and traditional brand building display and offline media at the top.
Social has always been strong in this mid-funnel area but Google has made significant improvements to YouTube for performance, dynamic video display ads and Discovery Ads to compete. The Google Discovery formats are engaging and give advertisers a good alternative to the native networks such as Taboola and Outbrain.
Focus on Talent to Continue
Agencies are only as good as the talent they employ and the Chief Exec or MD is increasingly going to be a Chief People Officer. They’ve got to lead culture transformation, attract and retain the best talent, train employees for a digital and AI-laden future, and build a modern workplace that is safe, digitally smart, diverse, and creative.
Smart Campaigns Will Kill the Keyword
The days of vast granular PPC campaigns are increasingly over. With the correct tracking and attribution Google and Microsoft AI increasingly selects when to surface ads vs searches, what ads to deliver and how much to bid.
It’s uncomfortable for old school “Retail Is Detail” PPC buyers, but we’ve seen repeatedly that it definitely works… However clever we are we can’t juggle as many signals as the machines.
Final banker prediction – The summer and Christmas parties are going to much better in 2021!