Ads in 2021: IDFA, Universal ID 2.0, and DTC Inspiration

2021 will be a watershed moment for digital advertising. As we near the exodus of third-party cookies, the industry is poised for a fundamental transformation. Here are three predictions to keep your eye on over the next 12 months.

Lessons Learned from IDFA 

When Apple announced IDFA restrictions, a lot of marketers and publishers were caught off guard without a solution already spec’d out and tested to replace IDFA. With Google Chrome phasing out cookies in 2022, brands and publishers will learn from history as they prepare for the even larger apocalypse that the industry faces.

In a survey we recently conducted, only 32% of brands and publishers felt confident in their plan for identity resolution once third-party cookies are phased out. In 2021, we’re likely to see brands and publishers double down on their identity efforts after getting a sneak peek of the dangers of apathy during the IDFA update. With one year left until the deadline, brands and publishers will invest heavily in identity frameworks that make use of their first-party data assets. They’ll be prepared this time.

Embracing the Universal ID 2.0

With Chrome phasing out cookies, publishers know they need to rethink their strategy for a post-third-party-cookie world. Their survival rests on being able to deliver targeted audiences for their advertisers. This means adopting solutions and frameworks that incorporate modern interpretations of identity. The Universal ID, backed by a consortium led by the Trade Desk, has gotten a lot of momentum.

However, that doesn’t mean Universal ID is the entire fix. In that same survey we ran earlier this year, respondents said email addresses (29%), first-party data collected directly by publishers (25%) and embracing The Trade Desk’s Universal ID 2.0 (22%) are the most important digital assets when trying to replace third-party cookies. This suggests that Universal ID’s adoption will not be a set-it-and-forget-it scenario for the industry, but rather part of a balanced meal. Publishers will still prioritize the collection of first-party assets, including email, in concert with any Universal ID adoption.

Legacy CPG companies go DTC

We’ve seen CPG brands traditionally build their empires off of hard-to-measure branding that paid off in sales propagated by in-person stores. There was already a trend, in the wake of massive exits like Dollar Shave Club, for large CPG companies to pursue strategies of creating relationships with customers directly, thereby strengthening CRM. However, now that Covid has largely stopped in-person shopping, the DTC model has been turbo-charged.

For example, Mucinex launched a new DTC website and introduced a new apparel line called Sickwear in October. Why? Launching a website gives Mucinex a trove of first-party data for ad targeting. Even if consumers don’t buy the clothes, they’re visiting the website to check out the new line. We should expect more CPG companies to follow suit and invest more heavily in social, advertising, and email newsletters that forge relationships directly with consumers.

When looking ahead to 2021, identity and first-party data will be a big part of the dramatic change facing the industry, but marketers also are going to have to leave room in their plans to pivot on a dime. 2020 taught us all that we must plan for what we know is coming but also for the unexpected.

Kerel Cooper is the Senior Vice President of Global Marketing at LiveIntent.