MediaRadar Blog

The 2 Biggest Programmatic Trends We've Seen in 2021

The 2 Biggest Programmatic Trends We’ve Seen in 2021

Needing flexibility and efficiency more than ever, marketers shifted significant portions of their budgets into programmatic advertising last year. 

Flexibility may not be the key word in marketing these days, but professionals still need to drive the most return with their budgets. Targeted, automated purchasing helps them do just that.

We’ve seen a surge of advertisers begin buying programmatically this year. As we dove into the subsets of buyers and their buying behaviors, we identified two major trends. 

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

MediaRadar Blog Signup

1. DTC spending keeps climbing

We all know that direct-to-consumer brands were uniquely positioned to benefit from the pandemic. Distinguishable brands already had their online stores up and running, and their digital marketing strategies in place.

Even though they were in an advantaged position, accuracy and efficiency became even more important in the increasingly competitive eCommerce market. 

As a result, brands increased programmatic spending, often in new premium programmatic formats. DTC companies typically increased their ‘experimental budget’ to 5-15% during the pandemic to see what worked best. 

Brands, like Poppi and Olly, for example, shifted significant portions of their marketing budgets to Amazon DSP.

“The endless digital shelf has provided new opportunities for companies to expand their brand,” said Allison Lewis, vp of commerce media at Wunderman Thompson Commerce, per Digiday. “Creating a robust media strategy that includes Amazon is vital to continue to grow as a digital brand.”

According to our data, DTC companies have spent $879 million on programmatic in 2021 so far (Jan – May), which is up 26% from 2020. In the same period last year they spent $697 million.

Even as foot traffic in brick and mortar stores increases, DTC programmatic spending is not levelling off. 

2. TV advertisers may use OTT to guide Addressable TV campaigns

Addressable TV is the dream of TV advertisers—delivering relevant ads based on household targeting, rather than program targeting. 

And it’s expected to surge over the next two years. eMarketer predicts that this format’s spending will increase 75% to $3.6 billion by 2022

This shift comes at a time when streaming is starting to cool off (slightly). According to a recent report from Omdia, consumers have hit their ceiling for how many streaming services they’re willing to use—and yes, this includes AVOD services. 

Pay TV is “largely stable and SVOD continues to grow.” But when it comes to ad-supported streaming, the report stated that “a significant number of users are eschewing AVOD and instead increasingly consuming content via paid alternatives.”

While OTT grabs headlines and is full of potential, TV advertising still dwarfs the young format that has very limited inventory

Interestingly, we’ve even seen OTT spending decrease. OTT advertisers have spent $55mm in 2021 YTD (Jan – May), which is down 40% from 2020 in which they spent $91.4 over the same period.

Though spending has decreased, it’s worth noting the number of brands increased slightly YoY (2.3k in 2020 vs 2.6k in 2021). This suggests that OTT advertisers may be using programmatic to test the efficacy of their campaigns, and then strategically place spend where their programmatic efforts were successful.

OTT advertising may influence the way TV advertisers run their cross channel campaigns, but it hasn’t become a mainstay for brands yet.

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.