This year brought on considerable shifts in our industry. From changes to the way browsers manage cookie tracking, to emerging channels like CTV and DOOH, 2019 was a year of evolution and transition. 2020 is likely to be similar, as industry participants, advertisers, and publishers grapple with 2019’s impact, while also navigating a host of new opportunities and challenges. Consumer behavior will continue to evolve as well, adding to key trends to address. All in all, I expect the new year to be an eventful one, particularly with a presidential election on the horizon in the US.
But what’s coming? I’ve been fortunate to participate in multiple thought-provoking conversations in recent months, engaging our customers and partners about what’s in store next year. With that in mind, here are a few trends that are likely to set the trajectory for the market.
Content and commerce will be key for consumers and publishers
Consumers continue to evolve their media consumption and how they discover, engage with and transact goods and services. At the same time, media companies need to continue to diversify and find new sources of revenue growth. This is where commerce comes into play. For premium publishers, it’s a huge - albeit untapped by many - opportunity that can fit neatly into their existing business. Publisher news and lifestyle content attracts users seeking both information and inspiration. Each is a key step in the customer journey. Trusted publishers also have a built-in user base of in-market shoppers waiting to be activated. Next year, I expect more publishers to integrate commerce across content through native and shoppable ads, as well as other shoppable content programs. They will also look to the full spectrum of consumer engagement available, including experiential marketing, live events, games, immersive experiences and more.
Trusted content will be vital during the presidential election
A presidential election year is always a big year, but 2020 will bring special challenges and opportunities for advertisers. It will be shaped by recent changes in privacy regulations, pressures around fake news and advertising, and technology innovations offering more relevant news and ad content. Advertisers ignore consumer needs at their own peril, and consumers want to be able to trust what they see and hear.
Our own news consumption studies have shown this over and over. Half of the consumers surveyed say they choose news sources based on credibility alone and they like brands that advertise on trusted sites. It’s time for our industry to step up and offer choice and transparency to earn consumer trust. The stakes have never been higher. 2020 will be the year of trust and choice.
Building the future with Gen Z
2020 will see a greater interest and catering to Gen Z. They’re on track to be the largest, most educated and financially powerful generation of all time, which means they have the ability to move the needle for advertisers. Gen Z is motivated, socially conscious and individualistic. They’re mobile-first and expect unlimited information and entertainment at their fingertips. From immediate access to a world that’s totally on-demand, Gen Z is accustomed to speed and accessibility. For media, that means real news, 24/7, built for a mobile experience.
For brands, that means authentic storytelling and meaningful connections that resonate with audiences’ values and perspectives. For advertising, Gen Z will look for immersive experiences - something that provides utility and entertainment. From saving money to choosing your own adventure, they expect advertisers to reward their time with something of value.
The battle between SVOD & AVOD
More than 80% of marketers see digital video becoming a greater chunk of their marketing mix as consumer adoption continues to shift there. But the key question is what type of video formats will ultimately dominate the market? Video will continue to evolve with an all-out battle between subscription video on demand (SVOD) and ad-based video on demand (AVOD) business models, with some major growth in rewarded and user-initiated video formats, as well. We will also see a greater convergence of traditional, long-form TV, and increasingly, short-form, largely mobile and OTT formats. These will create more and more valuable opportunities for advertisers, publishers and consumers to engage. Interestingly, as more SVOD providers launch services for a flat rate per month, consumers are becoming more conservative about the services they sign up for. SVOD players will need true content differentiation to carve out market share. Disney+, with everything from Iron Man to Disney classics and exclusive originals, is a good example of a winning combination.
The evolution of regulation
A major component of 2020 will be privacy and data regulation as CCPA comes into effect in the new year. The US is not alone in evaluating its approaches to regulations, and we’ll continue to see inputs from governments around the world. In tandem, the industry itself is evolving to support privacy initiatives and provide consumers with greater transparency and choice when it comes to their data. Implementation, of course, will not come without challenges, but the greater focus will create new opportunities and allow for innovation. It's important for everyone in the ecosystem to act in a principled way and seek to build trust with consumers. In short, what’s good for consumers is good for us all.
The need for transparency is changing programmatic
Programmatic advertisers want greater clarity from publishers, UGC platforms, DSPs, and agencies. There’s a growing expectation that partners will grant access and insight on a range of matters like media inventory; data provenance and quality; campaign attribution; and fees. Without proper transparency, advertisers will shift their investments elsewhere. There’s already evidence of it in the rise of in-housing. Similarly, I expect open exchange transactions to decline, with greater growth in premium programmatic marketplaces - think programmatic guaranteed deals and private exchanges with high-quality inventory - that tend to be more trusted and transparent.
The future of native advertising is emerging
Native advertising continues to explode. Brands spent $44bn on it this year -- and that number will climb as emerging channels deliver more turnkey formats for buyers. AR ad spend, for example, will go from $780m in 2019 to nearly $3bn by 2022. Investment is following consumer adoption as AR user growth surges. But one key to AR marketing’s success is the improvement in the native ad experience, with vendors and publishers innovating features and content. Innovations like a smoother user interface, adjustable overlays, and smartphone camera changes have attracted brand interest.
Pottery Barn, for example, used native AR ads to help shoppers see home decor options in their actual home. Other brands like Chevrolet, Volvo, JCPenny and Home Depot are doing the same. In 2020, savvy brands will invest more in emerging native ad formats like AR. And mobile connectivity advancements, especially 5G, will pave the way for more user-friendly and immersive experiences that will be delivered and streamed in real-time and at scale.
As we head into the new year, these are a few of the standout trends I expect to shape the market. From transparency to native to video to commerce, the landscape is evolving, with more change expected.
Ivan Markman is chief business officer of Verizon Media.