THE REVOLVING ADVERTISING, MARKETING, AND MEDIA LANDSCAPE

by Adam Ortman, SVP Growth & Innovation, Generator Media + Analytics

This article was published by PerformanceIN, April 20, 2022

The past few years have taught the world that a lot can change in 12 months, especially with a global pandemic in the mix.

At the end of 2020, fewer brand-building tactics meant more focus on short-term activation and sales. Consumers were flocking to social media in record-breaking numbers to maintain some semblance of human connection amid quarantine, isolation, and uncertainty. Where consumers go, advertisers follow, so it was hardly surprising when, according to eMarketer, digital ad spending surged 38% in 2021.

In 2021, new consumer privacy laws (and the tighter enforcement of existing ones) sharpened brands’ privacy policies and pushed publishers and advertisers to relinquish their reliance on third-party cookies. Then, the video streaming space further matured as more consumers cut the proverbial cord. According to eMarketer, the average adult internet user in North America was subscribed to 8.8 subscription video-on-demand services by the second quarter of 2021, compared to 6.9 at the end of 2020.

Now, experts agree that in just a few years, U.S. digital spending is expected to make up more than 75% of all media spending, surpassing $300 billion. And we needn’t look further than the rising investments in video, connected TV, and e-commerce ads, as well as the expanded usage of programmatic channels, to understand why. As CTV platforms continue refining their targeting and measurement abilities, fraud detection, and programmatic inventory, we will see the programmatic share of CTV ad spending skyrocket.

Brands will need heightened innovation in contextual ad targeting and first-party data collection efforts

Although Google has pushed back its plans to cut off third-party tracking to 2023, industry players should still prepare for the impending “cookiepocalypse” led by Big Tech giants. In fact, third-party cookies have already been phasing out as social platforms such as Facebook and Twitter ask users to pick which topics they’re most interested in. HubSpot reports that 41% of marketers believe their biggest post-cookie hurdle will be their inability to track the correct data, so brands should start getting creative and exploring alternative ways to identify users now.

In 2022, we should see heightened innovation in contextual ad targeting and first-party data collection efforts. However, to gather the information they need, brands must give consumers a better reason to share their data, like offering more personalised experiences. Brands will also need to shore up their cybersecurity efforts to inspire consumer trust. Putting a heavy focus on testing and optimising will also be important to keep every dollar accountable and ensure every media placement provides positive business outcomes for clients and brands.

Spending on programmatic has continually increased over the years, meaning it’s been a vital part of marketing success. Financially, this is great for both publishers who receive the incoming ad dollars and advertisers who benefit from their targeted ads. However, because programmatic often relies on third-party data, it loses its effectiveness without them.

Vox Media has responded to the change by introducing new adtech of its own: a suite of tools for Concert, its publisher monetisation tech, that comes from their in-house first-party data platform. The suite essentially brings ease to publishers trying to use its first-party data across a large site network. Meanwhile, The New York Times has also unveiled its own “first-party data marketplace” for its direct-sold ads business. It started development in 2019, and after less than a year, it found first-party data to be just as good — and sometimes better than — third-party data.

Programmatic has long been known as a quantity-over-quality play. Layer in privacy expectations, and we get an interesting advertising future. The takeaway? Brands need to roll with the privacy punches and ensure they’re compliant on all fronts while future-proofing themselves for tomorrow’s media and targeting obstacles. With over 50% of media budgets going toward programmatic, it’s time to consider reallocating those funds to first-party data collection ownership avenues.

Brands will lean into YouTube to drive mid funnel activity

In 2020, eMarketer projected U.S. CTV ad spend to reach $8.11 billion that year and $18.3 billion by 2024. Yet even though viewing has been skyrocketing, eMarketer says most people stream ad-free on platforms like Netflix, Disney+ and Amazon Prime Video. However, with over two billion monthly logged-in users, over 120 million eyes watch YouTube on television screens every month. The pandemic has only put an exclamation point on these numbers.

According to Hootsuite, this makes YouTube the second most visited website and opens the door for YouTube to offer advertisers its space to reach those streaming viewers, including with Google Ads. Recognising the ad space, Google created a page for advertisers to create, post, and target ads. Marketers only pay when the ads are viewed, and they receive real-time insights on ad performance with their linked Google Ads and YouTube Analytics accounts. Opening its own advertising offerings with YouTube Advertising makes the website prime real estate for marketers of any size company needing reliable consumer data in the coming years.

Steven Shnayder, director of biddable media at Generator Media + Analytics, believes we’ll see more brands lean into YouTube not only from a brand awareness perspective, but also to drive midfunnel activity. Among the trends driving this are advertisers fighting over limited ad space and finite search volume. Just look at the fitness industry, which saw intense competition in 2021 as new brands (e.g., Barry’s X and Forme) and established players (e.g. Apple and Peloton) fought for the same customers and the same keywords.

Many of the advertisers we work with have hit the peak of what they can spend in terms of paid search without hitting diminishing returns. With YouTube, advertisers can leverage search history using custom intent audiences, and in some cases, they can reach those users more efficiently than they might be able to with traditional search.

Looking ahead at the trends to come is both an art and a science, but ultimately, we don’t know where the remainder of 2022 or the years that follow will lead. However, we do know that change is inevitable, so brands, advertisers, and publishers should start preparing now.