What will happen to digital advertising in 2021? Will there be an increase or decrease in advertising budgets? How and where should marketers invest most? And what will be the main strategies to reach the right target? Here are some trends that will accompany us in the year following that of the outbreak of the Coronavirus pandemic, which we would prefer to leave behind but that we must take into consideration as it is strongly linked to the trends that we present in this article.
As we move closer to 2021, one thing is clear: digital advertising will be one of the most encouraging and inspiring channels available to marketers next year. The Coronavirus pandemic has radically altered the global advertising landscape: on the one hand, in the early months of 2020 marketers had to reduce the budget allocated to traditional channels and increase the one planned for digital channels, accelerating the transition to digitization. On the other hand, some companies have been forced to decrease, or even suspend, the advertising spending planned for 2020.
Those who work in the field of marketing and communication know it: when you are in critical economic times, one of the first choices a company makes is to compress the budgets for these areas. Not surprisingly, during the year characterized by the spread of Covid-19 there was a sharp decline in the advertising campaigns of some companies that were particularly affected by the crisis. Let’s think, for example, of the tourism, transport, event and entertainment industries. Fortunately, there were exceptions: the food and pharmaceutical sectors went against the tide, significantly increasing their advertising investments.
Postclick, a global leader in digital advertising, conducted a market research in October 2020 that involved managers, directors, marketing experts and chief executives to define the key trends and forecasts that should dominate the digital advertising of 2021. We present them to you in this article.
#1 Digital advertising will continue to grow in 2021
The Coronavirus, in addition to having radically changed our daily life, has made profound changes in the way we work and interact with other people. Having access to the Internet today is essential to be able to stay connected with the world around us. The exponential increase in the use of software and video conferencing programs to attend lessons and meetings, of social media to stay connected with our acquaintances, of online purchases on e-commerce websites are just some of the examples that show us how the pandemic has accelerated the spread of digital among users and companies’ transition to digital.
But will the impact of the pandemic last for the next few years? Statistics say so!
Taking into account the propagation of the web in our daily lives and the forecasts of the experts, next year marketers could cut part of the budget allocated to traditional channels (print advertising, TV commercials, direct mail, …), increasing advertising spending on digital and allocating it to sponsorships on social networks and search engines, email marketing and to the creation of particularly creative and engaging content such as videos.
But beware, as in any market, an increase in demand leads to an increase in prices. Consequently, to maximize the return on investment, it is advisable to choose carefully where and what to promote. An anonymous marketing director said he expects that “costs will increase as more and more brands shift their budget to digital. This will lead to the need to be extremely efficient at every stage of the process, from creation to publication and diffusion”.
#2 Choosing the right platforms to invest the budget on
Based on what has been said above, next year marketers will find themselves forced to evaluate which platform to invest their budget on to make the most profits possible and achieve their goals. Goals are one of the aspects to be taken into consideration when choosing the right platform. When creating a strategy, we must ask ourselves what we want to achieve in the short and long term: increase brand awareness? increase sales? or increase inbound traffic on a website? These are some of the questions to ask yourself when planning your digital strategy. Two other fundamental aspects to take into consideration are the target audience you want to reach – which social network do users who might be interested in our business use? are they part of a narrow niche? – and the most suitable tone of voice.
What are the platforms to bet on in 2021 according to experts?
According to the people interviewed in the market research conducted by Postclick, Facebook and Google will continue to impose their supremacy in the advertising field also in 2021. Over 87% of the respondents said they use both Google and Facebook, identifying them as the best platforms on which you can get the highest ratio between advertising spend and performance.
On the third step of the podium, we find Instagram: the visual and captivating content typical of this social media is still able to communicate emotions immediately and effectively and is still the right tool to keep a high level of user engagement and attention.
Finally, next year, marketers will also bet on TikTok, the free mobile app that allows you to record short videos (between 15 and 60 seconds) and which is a great success among Generation Z, but not only.
Although experts have indicated Facebook, Google, Instagram and TikTok as the best platforms to invest in next year, no one will be able to predict which of these will be the most successful. The advice of the experts is to distribute the budget on multiple platforms in order to have more chances to understand which is the most suitable platform for your brand and the one that generates the most engagement.
We have said it several times now, in marketing there is no right or wrong recipe. Marketing is made up of constant trials and tests. For this reason, before betting everything on a single platform, it is best to try several different ingredients to find the right recipe for success.
#3 Exploiting the potential of video ads
For some years, video advertising has been a major player in the advertising scenario and an annual growth of 4.8% of the dedicated advertising budget is expected. The spread of smartphones and their advanced technology will be the main drive in the next few years in video advertising: for example, the high mobile processing power and the new 5G Internet connection speed will allow for the creation of increasingly profitable video ad strategies. Consumers affirm that videos are the winning format. Not only do they prefer to watch videos online over traditional commercials, but 84% of them also said that after watching a video of a brand they made a purchase.
Time spent watching videos online is also expected to grow: users will spend an average of 100 minutes per day – which equates to 12 hours per week – while in 2018 the average was only 67 minutes per day. Companies therefore have the opportunity to communicate with consumers through video messages like never before and to achieve excellent results.
In line with this trend, social platforms are introducing new video formats to foster new and deep forms of engagement on their sites and apps, offering brands new business opportunities.
But beware of the downside. The success of video advertising will lead consumers to be inundated with it every day. Consequently, in order to stand out, attract the attention of a fragmented audience and generate conversions, it is essential to produce authentic, creative and engaging videos.
#4 Getting your priorities straight
What are the priorities indicated by marketers in terms of digital advertising for 2021?
Increase the conversion rate
Next year, marketers will focus their attention on the so-called Conversion Rate, i.e. the ratio between the number of visitors who access a page or website and how many of them perform a certain action. To increase their profits, they will focus on taking a holistic approach to digital advertising (without focusing solely on getting more clicks – an approach known as “get more clicks”) and designing advertising campaigns that cover the entire customer experience, providing customers with the opportunity to interact with the brand and strengthen customer care.
Increase the return on ad spend
In 2021, as the demand for digital advertising will be in strong and perennial growth, as previously written, the costs will increase and the performance will decrease. But marketers are already focused on studying new ways to optimize the results of their ad campaigns and maximize the return on ad spend.
Improve segmentation and targeting
After Safari and Mozilla Firefox, recently Google as well announced the disappearance of third-party cookies on Chrome, the most used web browser in the world. This is a decision that will mark the end of tracking user behaviour and interests.
Third-party cookies are tools widely used by many advertisers to track user visits to all the websites on which they offer their services. These cookies are also useful to carry out monitoring and targeting activities that allow advertisers to target their ads accurately by exploiting data contained in the user’s history.
It is therefore not surprising that, given the imminent death of this type of cookie, experts must focus on creating new strategies to identify the audience segments to which to target their online advertising campaigns.
#5 Programmatic advertising and artificial intelligence
Personalization will be one of the keywords for marketers committed to reaching the right target for their online ads. Because advertisers are increasingly committed to maximizing their investments, they will try to find the right strategy to always show the right message to the right person, at the right time and also on the right device.
Once, in a more or less anonymous way, one is identified as the target of a certain advertising message, ad hoc technological platforms come into play including Google Ads, Facebook/Instagram Ads and Apple Search Ads.
You may have already noticed that if two people open the same website from their personal computers at the same time, they will almost certainly find different advertisements. Or the ads you see may also change based on the time of day you look at a particular site. Or, they may change according to the device you are using, as the photo below shows.
Artificial intelligence helps advertisers in this activity by resorting to big data and machine learning software that allow us to precisely identify the target to turn to, based, for example, on the demographic aspect (i.e. if I live in Rome it is plausible that I might not be interested in an event that takes place in Milan) and behavioural aspect (the searches carried out, the interactions on social networks and the websites visited communicate what our interests and needs are). All this information defines a unique “user profile” for each of us and therefore allows us to show the message not only to the right person, but also to use the most effective advertisement at that particular time and on that particular screen, thanks to the sophisticated machine learning software algorithms.
The experts interviewed by Postclick stated that in 9 out of 10 cases, personalized ads generate profits. However, despite the advantages of programmatic advertising, it is not easy to carry out this activity: 3 out of 4 marketers say the cause is the lack of internal resources because “to effectively personalize your ads on a large scale, you need the right team, the right data and the right tools.”
It is therefore no wonder that next year one of the main trends in digital advertising is the investment in technologies that take advantage of artificial intelligence and that will require fewer resources to achieve greater performance.
In the year of the spread of the Coronavirus, digital advertising is experiencing unprecedented growth which, according to experts, will continue to increase in the next year. The pandemic will also lead to an increase in companies investing their budgets in online advertising campaigns and new trends in consumer behaviour, technological advances and regulatory changes.
To excel in digital advertising, marketers will need to research new strategies to stand out from the competition and be able to reach and communicate appropriately. But, fortunately, they will have a large number of platforms on which to manage their campaigns, innovative and engaging formats, and advanced and sophisticated technologies.
What do you think of these trends? Will you put them into practice next year? Write it in the comments and contact us for more information on our marketing and communication services.