By Ayman Haydar, CEO, MMPWW
Déjà vu. That’s the main thing I’m experiencing as we close off the first month of 2021. Under normal circumstances, this is usually when I’m at my most optimistic for the year ahead, but let’s be honest, ‘normal’ left town some 12 months ago, leaving behind a gaping hole of uncertainty from which the industry has yet to fully recover.
Don’t get me wrong; in comparison to 2020, this year already holds more promise, but if everyone was hoping for a fresh start on January 1, they have had a rude awakening. In reality, it’s more like 2020 Part 2: The Survivors Edition. If last year was all about taking critical action to stay afloat, 2021 is shaping up to be more about asset protection. Low risk, low reward, carefully does it… etc.
As a result, this leaves little room for creative thinking and innovation. It feels as though the industry is stuck in a time loop, repeating the same things over and over. Talking about growth at a time when so many are struggling is deemed insensitive, so instead we’re fixated on the same survival tactics, the same technological solutions and the same topics of discussion: death of the cookie, anyone?
The latter is actually worth discussing a bit more given we’re a year on from Google’s bombshell announcement, but more on that later. For now, the broader issue here is how we can keep moving forward in this Covid-hit world, planning for the future whilst still being agile enough to deal with the present. I know, it’s a big ask.
Digital advertising has long been an attractive option for marketers looking to reach their consumers in increasingly inventive and personalised ways, but even brands were taken aback by the rate of digital transformation forced upon us by the coronavirus. According to a study by the cloud communications platform Twillo, the pandemic accelerated companies’ digital communications strategy by a global average of six years.
This essentially upended an already evolving ecosystem, leaving the marketplace even more fragmented than before. Caution is now the default setting for most. While we may talk big about the idea of radical change, ultimately we need to focus on getting the basics right first.
In this region, digital adoption has been high on the agenda for a while, but in practical terms it had yet to come to fruition. Fast-forward a year and we’re seeing digitisation underpinning and reshaping many of our key industries, encouraging new solutions and partnerships to emerge as a result. It’s certainly a step in the right direction.
What comes next is anyone’s guess. As I’ve said in the past, fortune-telling is not my forte. I’d argue that no one is able to confidently forecast anymore because our recovery is not linear; there have been so many peaks and troughs as we ride out this storm. As we face tighter restrictions regionally, our ingenuity and resilience will be called upon once again to keep going and provide whatever services our clients need. This isn’t a time to be selfish, nor is it a time to promise the world and look so far ahead we miss what’s going on in the here and now.
Instead, I think we should double down on the key things that matter, stop reaching for buzzwords in lieu of nothing else to talk about and help move the ad tech world out of this rut by focusing on what we can control, and leave the rest for a later day… preferably when the world isn’t in the midst of a global pandemic.
Here are the three talking points I believe will shape this year:
Mediums that matter
I’ve lost count of the amount of ‘trends’ pieces I’ve read so far this month. January is always the same: articles full of predictions centring around experimental technology with not much thought to practical execution. Look, I’m all for exploring what this could mean for us in future, but right now if it’s not going to make a difference to the bottom line then it should take a back seat. Take VR in a 5G world, for example. Great in theory but I’ve yet to see this really take off in a meaningful way.
Instead, I think our focus should be on fine-tuning and exploring existing mediums and leveraging them to be more successful. 2020 marked the maturation of podcasts as a cross-purpose medium for both enjoyment and education. This will only grow in terms of volume (there are currently about 1,750,000 shows online) and subsequent advertising opportunities. Valued at $9.28bn in 2019, the global podcasting market is expected to grow at a compound annual growth rate of 27.5 per cent from 2020 to 2027, so ignore it at your peril. Gaming is also a strong area for further exploration. As publishers continue to balance in-app ads with in-app purchases, gamers are beginning to appreciate ads as a means of discovery, encouraging them to play for longer and increase their exposure over time.
Last, but certainly not least, video on demand (VOD) will continue to dominate. According to Statista, user penetration is expected to hit 29 per cent by 2025, with revenue in this segment projected to reach $85.9bn this year. As the quality of streaming improves on-the-go with smartphones and at home with smart TVs, barriers to entry around speed and accessibility will give way to a race for the best-personalised experience. We’ll see more integrated AI monitoring consumer viewing habits to serve up more tailored and intuitive content as a result.
What’s happening with privacy?
Big tech effectively shapes the internet as we know it, and despite increased scrutiny surrounding everything from data collection methods to anti-competitive practices, it’s consumer privacy that has stayed in the public consciousness. Browser crackdowns over the last few years, coupled with Apple’s impending IDFA rollout and Google’s Privacy Sandbox experimentations (practicalities like segmentation, ad targeting, and delivery still remain up in the air) over the last 12 months show how far-reaching and impactful these changes will be for the ecosystem at large. As for where we are right now, well, privacy will essentially become the competitive advantage for 2021 as more legislation comes into play, particularly in the US as the CCPA (California Consumer Privacy Act) completes its transition to become the CPRA (Consumer Privacy Rights Act), affecting the rest of the world’s data practices as a consequence.
Facebook recently experienced first-hand what can happen if you mismanage communication around privacy changes; users flocking elsewhere in their millions. WhatsApp will have a difficult time winning back user trust in the short term, but given the alternative, Zuckerberg has the advantage here and he knows it. That being said, don’t discount growing user autonomy in decision-making. When it comes to shielding their activity online, users are getting smarter and more brutal in quickly abandoning platforms that no longer have their best interests at heart.
Continuing the social conversation
No, I don’t mean more on Bernie Sanders’ celebrity mittens, I’m talking about the nature of social media today at odds with how many of us are choosing to actually spend time on these platforms. Unsurprisingly, global online content consumption doubled in 2020, with an accelerated appetite for social media and CTV in particular. A report by DoubleVerify found that, on average, daily time spent consuming content is 6 hours and 59 minutes, which includes phone, TV, and other forms of digital media. From a brand perspective, that’s music to their ears; multiple ways to reach their users and get a seat at the table. Users too have become more accommodating to receiving ads, but only if they match their needs and enhance their experience online.
Currently, there are 3.78 billion social media users worldwide ready and willing to interact with their favourite brands on the platforms that matter to them. In this vein, I think that TikTok will find itself on a lot more media plans this year as it moves from a novelty to a mainstream form of media and a hub for content creators to monetise. The platform now has more than 1 billion monthly active users and is enjoying phenomenal growth at the expense of apps like Facebook. Time spent on TikTok is up 325 per cent year-over-year, beating Facebook in terms of hours spent per user per month. Of course, Facebook is far from obsolete, especially with Instagram and WhatsApp in its back pocket still reaching that crucial millennial and Gen Z market. What we’ll see instead is more experimentation on each of these key platforms as advertisers look to crack the code of changing consumer behaviour. It’s certainly not as predictable as it used to be, and with the amount of free content skyrocketing, finding the sweet spot will be the number one priority for brands in 2021.
At the end of the day, our industry will keep ticking over, perhaps slower than in previous years, but I do believe that in time we’ll emerge stronger. While every business will have its own plan for navigating the year ahead, I’d encourage deviating from it now and then, thinking outside the box where possible and staying top of mind by taking risks and surprising people. For me, Groundhog Day ends now; let’s all move forward together.