2020 saw an acceleration in the shift towards digital advertising and away from traditional markets. Signal’s Senior Content Strategist John Alex Golden discusses the effect this will have on the 2021 advertising landscape.
The transition from so-called “traditional” advertising markets (print, radio, broadcast and cable television) into the digital space has been a steady but slow-pacing affair for the last twenty years. Risk-averse agencies of all sizes have been wary to make large shifts away from proven effective mediums, knowing that a risky bet on a young digital market may cause clients to look elsewhere.
The COVID-19 Pandemic, however, has accelerated this shift tremendously; the World Advertising Research Center (WARC) reports double digit percentage drops in TV, Radio, Magazine, and Newspaper advertising in 2020. The only categories to see a percentage increase? Social Media (+9.3%) and Online Video (+7.9%), with overall Online Display (banner, social, search, and video) seeing a modest 3.3% increase during the economic downturn.
A shift to digital advertising will not come as a shock to anyone experiencing life in quarantine; the skyrocketing work from home rate and shutdown of cities and towns across America led to users spending more and more time in front of their computers, phones, connected TVs, and streaming boxes, and little to no time viewing ads on theater screens, billboards, and bus stops. Advertisers follow the eyes and ears of their customers and change their spends accordingly.
More fascinating, however, is what WARC expects in the coming year: continued growth in 2020’s darlings of social media and online video. Agencies and in-house firms had the opportunity to play with house money last year, experimenting with new approaches to their marketing efforts online with little repercussion. Digital, after all, was the only game in town. Our clients have seen incredible success with these programs, with the ability to specifically target individuals based on a variety of data points and incredible statistics on views, interactions, and purchases that TV and radio cannot match. Our colleagues across the industry report similar outcomes, and clients are unlikely to want to abandon or cut back on these successful platforms now that they have the data to back up their successful nature.
2021 will not be entirely without struggle in the digital space. Fraud still runs rampant within the industry, as evidenced by the Uber debacle last year. Both consumers and regulators are becoming more aware of the massive amount of data collected by websites and apps, with GDPR-style regulation already coming to California and federal limits likely to follow. And while Republicans have beaten the drum on repealing Section 230 of the Communications Decency Act, Democrats (including President-Elect Biden) have also been critical of the provision and appear willing to amend or repeal the statute entirely.
The industry, however, has a history of rapidly adapting to change. The majority of banner ads were once delivered through traditional direct sales, with programmatic advertising being relegated to “remnant inventory” (a phrase that has been banished in the industry with the advent of private marketplaces online and new programmatic technology). Header Bidding has shattered the speed it takes to bid on ads, while expanding the pool of networks and advertisers with access to inventory. Advertising has adapted to the fall of Flash ads, the universal blocking of pop-up ads, Facebook’s “Pivot to Video disaster”, and many more substantive industry shifts; it will do so again as the industry grows and morphs to an increasingly online world.