A Vertical-by-Vertical Look at the Digital Ad Revenue Rally of 2021
The Covid-19 pandemic is far from over, but digital advertising is showing signs of a robust recovery. Overall, eMarketer predicts a swift post-Covid recovery, with digital ad spending increasing to $455.3 billion this year, up from 2020’s $378.16 billion.
At Smaato, we’ve seen our publishers experience not just a recovery but a rally in 2021. Publisher revenue did take a hit at the beginning of the pandemic, but we watched it recover steadily throughout the end of 2020 before spiking in 2021. In fact, by July of this year, ad spend began outpacing 2019.
Our report, based on a detailed analysis of data from the Smaato platform as well as wider industry data, takes a deeper dive into the ongoing recovery of digital ad revenues worldwide. For example, in the first half of 2021, we saw eCPMs increase globally year-over-year by 7.4% at Smaato.
Much of this recovery can be attributed to a general shift from the physical to the digital world as a result of global shutdowns. The continued success, however, is a bit more nuanced. Let’s take a vertical-by-vertical look at digital ad spend trends.
The dependence on screens for business, socialization, and, of course, entertainment created a boom in the time spent engaging with apps, sites, and streaming platforms. The effects of the screen time increase were particularly evident in the mobile gaming space, as evidenced by the below snapshots:
Indexed Revenue for Mobile Gaming Apps on the Smaato Platform
Indexed Impressions for Mobile Gaming Apps on the Smaato Platform
While growth accelerated in 2020, the trend continues well into 2021, suggesting a shift in user behavior. The data support the common understanding that games can form habits.
As brick-and-mortar retailers began to shutter their businesses, online e-commerce experienced a significant boon. Globally, e-commerce spend reached a whopping $861 billion in 2020, up from $598 billion in 2019. While e-commerce was already trending, the significant change in routine, ease of access, and relative safety of shopping online resulted in a major acceleration.
Online shopping is also gaining major traction on mobile devices, particularly under social networking’s influence (e.g., being able to shop directly from an Instagram ad). Rather than completing a purchase elsewhere, shoppers can easily check out from their device and go right back to engaging with the publisher’s app. As the convenience of online shopping and marriage of e-commerce and social networks flourish, mobile digital ad spend will follow. In fact, eMarketer predicts that, worldwide, nearly 75% of all digital ad spend will be focused on mobile by the end of 2021.
Health and Wellness
Fitness and wellness apps similarly experienced tremendous traffic growth in 2020 and beyond. With gyms closed and months of lockdowns changing daily routines, the demand for at-home workout options skyrocketed. The increased demand for at-home fitness led to major opportunities for marketers — and spend reflects it. According to eMarketer, at-home fitness companies spent more than $280 million in advertising in 2020.
Health and Fitness App Gross Revenue
Yet another category, financial technology (or fintech), saw a huge surge during 2020. According to AppsFlyer, financial and banking app downloads spiked by as much as 132% globally.
With banking customers stuck at home and financial service employees working remotely, at-home banking options became crucial in 2020 and 2021. Additionally, global uncertainty, high rates of unemployment, and fluctuating stock prices created a demand for stronger financial literacy and quick insights, which finance apps can provide. Amid times of uncertainty, these apps were able to help users gain more control over, and transparency into, their finances. In the U.S. and Europe, financial app installs grew a whopping 34% YOY in Q1 of 2021.
We see this trend at Smaato, too, with continued growth for fintech ad revenue stretching into 2021:
Indexed Total Fintech Ad Revenue on the Smaato Platform
Of course, advertising verticals that suffered more during the pandemic (like airline travel and hotels) are on a slightly slower road to recovery. As can be expected, travel industry digital ad spend took a nosedive in 2020, but it is already well on the way back up. After a 41% dive in 2020, travel industry ad spend is expected to grow by more than 15% in 2021, according to eMarketer.
We saw a similar dip in 2020 eCPMs for travel-related inventory globally. In early 2021, as vaccines became more widely available, we noticed a spike in eCPMs and ad requests, and following the initial spike, a steady increase. We expect travel verticals to soar as restrictions continue to ease.
Indexed eCPMs for Travel Inventory on the Smaato Platform Globally
Online Grocery Shopping
Finally, let’s talk about online grocery shopping. For 2020 specifically, online grocery shopping also saw tremendous growth as shoppers opted for both safety and convenience by shopping from home. This major shift toward online grocery purchasing “accelerated growth in U.S. ecommerce channel advertising to 49.8%,” according to eMarketer. As restrictions ease, some shoppers may return to stores, while others may have found that the “found time” and fewer physical shopping trips will keep them engaged with online grocery delivery. As new meal kits enter the scene and additional personal shopper apps can keep customers out of the aisles, ad spend may well continue as the need to incentivize households to shop from home increases.
As recovery continues (at varying rates, country to country), we expect that many of these learned digital media behaviors will stick. Opportunities continue to arise for publishers and marketers alike as audiences rely more heavily on screens for nearly every facet of modern life.