Advertisers, who traditionally make extensive plans for their media campaigns, were forced to change course last year, and lean into 2020’s uncertainty.
With its flexibility and data-driven nature, programmatic became increasingly popular. But will this still hold true in 2021? The experts weigh in on what they expect from programmatic in 2021.
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1. Programmatic will become a central part of the planning process.
Even though it’s now a new year, we are still very much in the COVID era and advertisers need to examine their ad dollars closely. Data-driven advertising and the ability to stop campaigns when needed will be more important than ever for brands.
“2021 will be the year when programmatic is no longer simply a line item on the media plan, but rather a central part of the planning process and any successful campaign,” explained Philippa Snare, SVP of EMEA at The Trade Desk to eConsultancy.
Premium programmatic formats—native, podcasts, and video—in particular, will be used to drive engagement with audiences who are still largely at home streaming video or consuming digital content.
2. ‘Programmatic Guaranteed’ is expected to surge
Programmatic Guaranteed (PG) is a way for advertisers to unlock programmatic’s speed and targeting, but for a fixed, upfront price. Advertisers also benefit from traditional advertising’s supply transparency, confidence in brand safe content, and audience accuracy. Advertising platform SpotX predicts that PG will grow 154% YoY in 2021.
“This shift is more evident for premium video supply on OTT and broadcaster video-on-demand platforms, where content consumption has spiked since COVID-19 and brands are looking to get in front of an engaged viewer base,” reported Sunil Naryani VP, commercial & partnerships APAC for Dentsu International.
In this time of uncertainty and change, agencies feel even more pressure than normal to find ways to optimize rates, targeting, and publisher accountability. Programmatic Guaranteed is seen as a fitting solution.
3. Advertisers take advantage of cookies while privacy policies allow it (but are uncertain about how much to spend)
Even though COVID-related occurrences, social justice issues, and the role of big tech in politics took over the headlines last year, the push for greater consumer privacy laws on the internet carried on without much widespread notice.
However, advertisers noticed. Google announced that it would remove cookies from Chrome and the California Consumer Privacy Act was put into effect. Apple also said it would put an opt-in and opt-out option around its IDFA. This means that the advertising industry was forced to prepare for a world without cookies.
As of last year, the use of programmatic ads was still up significantly. Between January and August, the number of brands executing programmatic advertising increased 26%.
But it’s unclear what will happen as privacy laws become stricter. With hesitancy about privacy laws, a new president about to enter office, and general lingering uncertainty, advertisers are wary of where to put their budgets. The IAB questioned more than 250 ad buyers, and found that about 39% of respondents said they only had ballpark figures and 10% said they had no idea. Together, almost half of those interviewed only had a loose idea of what their media budget looked like.
This is why programmatic is a good option while cookies are still used on Chrome. It adds flexibility to media budgets that other forms of advertising don’t offer. This is largely why 54% of budgets in 2021 are expected to be placed programmatically, according to the same IAB report.
4. Advertisers will continue to build a ‘test and learn’ mentality
It’s no secret, but it can’t be overstated: 2020 was a year unlike any other. Advertising firms and their partners were hit with significant budget cuts. Like many other industries, leaders had to be creative, pivot, and build resiliency.
Just like last year, uncertainty will be with us as we enter into a new presidential term, and the economy continues on its K-shaped recovery. But if advertisers have learned anything from 2020, it’s to pivot, test, and learn.
“While the bravest marketers might be well prepared to pivot, they’ll need to be ready to make mistakes too,” said Harmony Murphy GM Advertising at Ebay UK. “After all, new strategies might not always produce the best results the first time, so resilience, perseverance and a ‘test and learn’ mentality will be key.”
Brands that use data provided from programmatic to guide and teach them about their customers will be set up for success.
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