Jingle all the way: What will 2021 mean to the advertising world?

Surreal, eye-opening, melancholic, thought-provoking… 2020 has been like no other year in this century so far, as those wearing t-shirts with an "All I want for Christmas is 2021" logo will eagerly confirm. And though there’s a lot to be done before all pieces of the 2021 puzzle can be put together, the upcoming year has many hopes to fulfil. No pressure, 2021, but you'd better be good! On this cautiously positive note, let’s briefly revise 2020 based on the insights from the OTT Executive Summit before we can warmly welcome the upcoming year.

Looking back at 2020

The reality of 2020 dictated new rules, values, people’s habits, and a new outlook on what “normal” was. Unsurprisingly, despite the overall doom and gloom, some industries, which fit in this transformed layout really well, actually skyrocketed. They say every cloud has its silver lining, and that was true even for 2020.

Take for instance CTV, whose ad spend increased by 19% this year, according to IAB, primarily due to the pandemic and mass lockdowns. 

“TV forever has been a top funnel media, a media that you used to drive awareness but not to drive purchase. What’s so interesting about Connected Television is that it gives an opportunity to be both, a powerful branding media as well as a media that is very appealing to marketers who are trying to drive actual outcomes,”

- Scott Rosenberg, SVP/GM of Platform Business at Roku

Digital devices, including the CTV ones, to a certain extent became the guardians of people’s mental wellbeing. This fact is backed up by the Leichtman Research Group’s report that counted 400 million Connected TV devices in the US earlier this year. 

Another curious outcome of the pandemic is the shift that occurred in the way viewers started consuming OTT content. Nielsen shared their insights on the growing trend of co-viewing, as people were tied to their homes and family members for a long period of time.

The developments of the Internet and 5G networks added even more points to CTV’s score, making the market magnetic for app developers. As a result, streaming soared, turning 85% of Americans into streamers, according to Roku. 

“Streaming for the first time is overtaking live TV,”

- Andrew Hare, Senior Vice President, Research at Magid Associates, Inc.

In addition to the accelerated number of subscribers of existing streaming services, outlined by eMarketer, the industry has seen a true upswing in the launch of new platforms, like Apple TV +, HBO Max, Disney +, Paramount +, Quibi (currently shut down), and others. 

“The streaming war up until this point has been really between the Big Three [Netflix, Amazon Prime Video and Hulu], however, with the entrance of all these high profile services from Disney, Apple, Warner Media, NBCUniversal, and others we could be seeing a huge upset of the hierarchy moving forward. And the interesting thing is that a lot of these new services have taken different approaches, trying to tackle the Big Three,”

-Steve Nason, Research Director at Park Associates

With a CTV viewing time growth by 81% in 2020, as per Nielsen, and the abundance of entertainment opportunities CTV has in its goody bag, consumers admittedly started to have fewer problems with ads. Provided that ads could be the only price they would have to pay for the content. 

“Consumers found our service and services like ours really viable. Ad-supported became a really good way of getting your news and your movies, and perhaps your content library,” said Colin Petrie-Norris, CEO at Xumo.

“43% of US adults have paused a show they were watching to go purchase or consider the product that they just saw on screen. The conditions are very ripe between the consumers’ unwillingness to go to physical retail as well as more advanced ad products that can put the right ad in front of you at the right moment, have it be actionable,” said Scott Rosenberg, SVP/GM of Platform Business at Roku.

In fact, eMarketer’s Q3 report highlighted an increase in AVOD revenue by 31% in 2020.

This means that well-established AVOD platforms, such as Pluto TV, Xumo, Vudu, Crackle, and Tubi, will soon have to share the space with many newcomers, willing to hit the jackpot by adopting AVOD or a hybrid model that combines SVOD and AVOD features.

“Two-thirds of all viewing time is on ad-supported platforms. For the first time 53% of people 18+ said they watch at least one AVOD service. 51% in the US tell us they would prefer an advertising-based free model versus a subscription with no ads or EST [Electronic Sell-Through],” said. Andrew Hare, Senior Vice President, Research at Magid Associates, Inc

Looking forward to 2021

Though mysteriously staring at the crystal ball to see the future is always fun, eMarketer shared a few clues to make anyone’s predictions a bit more grounded. Following eMarketer’s estimates, the CTV ad spend will reach $11.36 billion in 2021, which is around 40% higher than the year before that. Additionally, 2021 will bring a reduction in Connected TV CPMs due to a meteoritic rise of supply.

Without having our heads in the clouds, let’s take a closer look at where this may take us from different perspectives of the CTV landscape.

Transparency. Privacy concerns have consistently been the Internet's stumbling block. Users want to know who collects what data and for what purposes. Looks like a few years after the introduction of GDPR, 2021 will finally dot some i’s and cross some t's in this area.

Since Google announced its plan to opt out third-party cookies from the Chrome browser, the advertising world has been restlessly trying to come up with a new unified first-party data approach for all its channels. As advertisers aim to secure their access to consumers, direct deals via PMP (Private Marketplace) or PG (Programmatic Guaranteed) punched above their weight. And though these are effective ways of reaching audiences, they risk leaving smaller players out of the loop.

In the meantime, the connected TV arena moved the question of transparency from high priority to critical. Hopefully, 2021 will bring some clarity to unified solutions for delivering first-party data to advertisers. Alternatively, we have good chances to watch further fragmentation of the market (which is not good) stitched together with a progress in addressability (which is good).

Investments. Streaming of all shapes and sizes continues to soar, and 2021 is expected to reveal its potential even fuller. Live streaming, especially related to gaming and sports, offers marketers a unique opportunity to reach out to a growing segment of esport streamers and watchers, who in 2020 constituted 92% of the US and UK Generations Z and Y populations, based on the data from GlobalWebIndex.

Certainly, anchoring consumers at home did oil the wheels and contributed a great deal to this trend. Outside of sports and gaming, another streaming playing field, that is gaining momentum as we speak, is certainly AVOD. A snowballing effect with which streaming services sprang up made watchers tight-fisted and less opposed to ads. This tendency is likely to stay the course. Therefore, if there is a perfect time and place to make the most of advertising budgets, it will undoubtedly be streaming in 2021. 

Formats. Provided that customers’ attention span was 8 seconds in 2020, as stated by Oracle, it’s obvious that capturing this attention will only get harder for brands with time. This is where engaging formats will come in handy. Browsable galleries, shoppable ads, carousels, TV-to-Mobile elements, Virtual Reality (VR), Augmented Reality (AR), these are just a part of the mantra for all advertisers out there.

The only way to walk customers through all the stages of the funnel is to stay creative, up-to-date, and make their experience lightweight, yet memorable. As for the channels, it’s worth going out on a limb and adopting an omni-channel strategy that will include DOOH (Digital Out-of-Home), which has been rocking the boat of digital advertising for quite some time now. Given that consumers are expected to spend much more time out of their homes to make up for 2020, if/when restrictions are relaxed in 2021, experimenting with new formats would be the way forward.

Advertising technologies. Due to the fact that programmatic as a transaction method is going to reach $5.72 billion in 2021, according to eMarketer, the talks about scaling up header bidding solutions for OTT and CTV have a clear rationale behind them. This technology will enable buyers to access dynamic auctions, while publishers will be able to send ad requests to multiple buyers and improve their monetization results.

Furthermore, 2021 will surely expose marketers to more attribution and promotion opportunities, be it showcasing customer journey for OTT channel owners with the Attriboost analytics software or providing across-the-board monetization capabilities through Allroll’s self-serve platform. Staying at the forefront of the AdTech innovation curve will open doors to windfall profits.

Intelligent automation. A recent focus on a minimized face-to-face human interaction fuelled interest in automation powered by AI (Artificial Intelligence) and ML (Machine Learning). This ultimately sowed the seeds of acceptance and made these technologies more approachable for businesses.

In the context of Connected TV, the advancements of AI led to the kickoff of ACR (Automatic Content Recognition), that originated from smart TV players, e.g. Samba TV, Samsung Ads and LG’s Live Plus. Their predictive algorithms create an additional layer of personalization for CTV viewership. Taking into consideration how personalization is worshipped by marketers, beyond shadow of doubt, ACR will play an important part in the CTV industry in 2021.

Takeaways

The time to say ‘goodbye’ to 2020 has come. Digital space, in line with the rest of the world, has gone through a lot of rethinking and reinventing, demonstrated resilience and agility, trying to foresee and comfort consumers in every single shift in their behavior.

These changes, however, mapped a whole new outlook for 2021. Data privacy, investment opportunities, engaging formats, advertising, and automation technologies will run the digital world in 2021 in an even more exciting manner than before. So, fasten your seatbelts, and let’s go!