Digital Advertising’s Big Moves in 2021
2020 was a challenging year for digital advertising, and there’s no reason to think 2021 won’t be as well. The industry is facing several issues, including privacy and cookies, ad tech dominance and ad fraud. And they’re all coming to a head now. With that in mind, here are five big moves I anticipate this year.
The beginning of the end of Google’s ad tech dominance
Simply put, frustration over Google’s monopoly on ad serving and the programmatic stack is at an all-time high. In 2021, at least one enterprise-level digital publisher will leave GAM for an emerging competitor who offers comparable, better-priced solutions that are pro-publisher.
Once the first shoe drops, we’ll see a similar shift to the one currently underway in video ad serving where brands are fleeing to Freewheel.
The dawn of programmatic 3.0
The current state of the programmatic ecosystem is under stress. It’s rife with fraud, middlemen, and tax collectors, which hinder it from providing meaningful value. This is especially true of the open auction, where a recent study from September found that basic targeting data — such as predicting a user’s gender — is less accurate than the odds of flipping a coin. Many marketers aren’t even aware of this.
Now, buyers are waking up to the fact that a big portion of their spend still isn’t transparent, nor effective. Further, spend is not going to the publishers they rely on to reach to their audiences.
This year, we may see the early decline of the open auction in favor of premium, brand-safe alternatives such as PG and new emerging channels. Will this be the year where open auction market share drops below 10%?
Retail ad spend eclipses Facebook
Retailers, such as Best Buy and Walmart, are making serious cheddar with innovative ad solutions. These programs are effective because they come with built-in attribution at the point of purchase.
With even more entrants from traditional e/retailers building an ads business, this year could be the first where they eclipse Facebook’s advertising revenue and start to unseat the giant.
More consolidation in the B2B space
Recently, B2B publishers have made a string of positive moves such as Industry Dive acquiring CFO.com and Adweek acquiring Target Marketing and Publishing Executive. This part of the industry has a strong audience base that’s highly monetizable, often earning premium rates. Furthermore, many of these publishers have or will add new revenue streams such as events and e-commerce.
I predict we’ll see not only other B2B publishers acquiring these companies to increase their scale and profitability, but also the entrance of private equity firms pulling these into larger conglomerates. Over the last few years, there has been a trend toward UK-based buyers purchasing these lucrative assets as well.
OOH makes a comeback
Finally, with vaccine rollout picking up, we’re likely to see a return to normal life this year, and thus OOH growth will return to pre-Covid levels. We also may see the first large OOH player buy a non-OOH media company. OOH, local broadcast, and newspapers are morphing into agencies, providing a growing set of local marketing solutions. As the world rapidly digitizes, and there are obvious synergies with these other large, local media providers, will 2021 be the year a major OOH player branches out with a splashy acquisition? The rise of the SPAC vehicle provides a creative way to finance this type of transaction.
Only a month into 2021, there are clear signs of major shifts underway in the advertising industry that will change the power dynamics moving forward. The only question is when.
Bonus Prediction: Google Chrome doesn’t kill third-party cookies
Google’s plan to kill third-party cookies by 2022 seems to be moving slower and with less clarity than the industry expected. Meanwhile, Apple is in the fray, looking to limit or kill mobile targeting on the iOS platform.
The industry responded with a gold rush of entrants touting new identity features. Some are new versions of walled gardens, while others seek to be the new industry standard. This fragmented reality is bad for the industry and further perpetuates the complexity of ad tech.
Will this be the year we see big advertising spenders (e.g., P&G, Unilever, Home Depot, Bank of America) organize in order to force the industry to put an end to the ad tech chaos and force everyone to get on the same page? Or will internet inventor Tim Berners-Lee put the control of consumer data in the hands of consumers?
My bet is Google will pump the brakes on killing third-party cookies.
Patrick O’Leary is CEO of Boostr.