Who got 2021’s marketing predictions right – and absolutely wrong?
In the return of his end-of-year tradition, columnist Sam Scott scores some of the most noteworthy marketing predictions made at the beginning of 2021.
Pundits and analyst firms made many predictions about how the pandemic will affect marketing this year. But to my knowledge, not one forecasted the single, greatest change that actually happened: The Great Resignation of 2021.
Every December, my tradition is to write a wrap-up column that grades the marketing and media predictions for the year. After all, the money spent on them may or may not be as useless as remaining unvaccinated in a global pandemic.
In 2018, I looked at Deloitte, Forrester, Gartner, Scott Galloway, HubSpot and Salesforce. (Read the results.) In 2019, I critiqued GroupM, Kantar, MoffettNathanson Research and the World Federation of Advertisers. (See the victor.)
But in 2020, I withheld my pen. Regardless of the debate over whether the coronavirus pandemic has been truly a ‘black swan event’, only the Arthurian Merlin could have foreseen the events of that year. It would not have been fair to judge anyone’s prior predictions.
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However, 2021 is different. After a 2020 of fear and uncertainty, we started this year with vaccine rollouts (whose successes have often depended on marketing) in a world where many are starting anew in one way or another. The fad of zero-based budgeting has turned into zero-based life.
Everyone began 2021 in the middle of fighting the pandemic’s physical and mental battles, so we all started the year in the same relative space. Further, 2021’s predictions are valid again because no other cataclysmic event occurred (except for a new Justin Bieber album).
To be fair and put new organisations under the microscope, I critique different analysts every year. So, who is in the spotlight for 2021? In alphabetical order: the Future Today Institute, GWI (formerly GlobalWebIndex), McKinsey, and Zenith Media.
Before my evaluation, the caveats. First, I looked at predictions for products, consumer behavior, and media use rather than general technology trends. Second, not all data from 2021 has been reported. Third, I discounted forecasts that I could not validate – one way or another.
So, let’s begin.
Future Today Institute
The Future Today Institute, a strategy firm in New York City, released a lengthy 2021 Tech Trends report. Here is what I pulled from the summary document.
“The shift from hands-on to heads-up is upon us, marked by the gradual transition from smartphones to smart eyewear ...This could be the year that Facebook and Apple launch their smart glasses.”
Smart glasses are the failed innovation that refuses to die. What is the quickest way to make everyone run away from you? Wear devices that might be taking pictures and recording video of everything around.
Remember: no one wants to wear stupid things on their faces. Still, Facebook did release Ray-Ban Stories in September 2021. Apple Glasses are also rumoured to be coming out next year.
Score: 2/3 for falling for the hype but correctly predicting that those two companies would do so as well. A question: Has anyone seen anyone wearing Facebook’s smart glasses over the past three months?
“With advancements in spatial internet, and the impending spread of 5G and smart eyewear, the prospect of a metaverse – a persistent, shared, digitally mediated realm that layers into the physical world – is coming into focus.”
Meta, now the parent company of Facebook, is indeed promoting the ‘metaverse’. We will see what actually happens. Score: 1/1.
“As margins continue to shrink in news media, industry consolidation continues at the expense of journalistic integrity.”
First, margins are indeed shrinking as newspapers had more revenue in 2020 from (cheap online) subscriptions than from (expensive) advertising for the first time, according to the Pew Research Center.
Second, news outlet consolidation in the US is one of the most important but least reported stories in the media world. In one example, Sinclair Broadcast Group owns approximately 186 TV stations across 620 channels in 82 markets and has reportedly imposed some conservative editorial slants.
Vox Media, once valued at more than $1bn some years ago, announced this week that it will acquire and merge with Group Nine Media. Score: 2/2.
“Virtual luxury fashion moves from fringe to mainstream in 2021. Affordable digital clothing will be available this year.”
I am not sure I would call it mainstream yet, but companies such as The Fabricant, Carling, Tribute Brand, Hanifa, and Dress-X are doing exactly that throughout the world. Score: 1/1.
“Celebrity makeup artists are selling AR filters to use in place of traditional makeup in video conferences and social media posts.”
This has been a thing for a few years now. Score: 0/1.
Total score: 6/8 – 75%. Not bad. FTI ranks in the middle of the pack in this year’s survey.
GWI (formerly GlobalWebIndex)
The analyst firm released its 2021 trends report in December 2020.
“Many predicted that COVID-19 would mean the death of the city. If you can work from home, why not move to the countryside? But actually, most countries are still urbanizing, with cities in the West evolving, not dying.”
In August 2020, James Altucher wrote that “NYC is dead forever.” Tom Goodwin left the city for Miami and has been tweeting praise of his new home ever since. However, the New York Times reported this week that the Big Apple is recovering economically – albeit at a slower pace than the rest of the US. More people are moving there now than before the pandemic. Score: 1/1.
“Consumers have gone from seeing a bright future ahead to feeling pessimistic – and this backlash will ensure our green values remain a hot topic through 2021.”
According to the Conference Board’s US Consumer Confidence Index, people are more optimistic now than they were when the pandemic started but less than before the crisis. It’s a mixed result.
According to the agency Good Must Grow’s 2021 Conscious Consumer Index, consumer sentiment towards being socially responsible has indeed returned to normal levels after a decline in 2020. Score: 2/3.
“As many populations are aging, the older groups’ market power is soaring. So their decisions and behaviors will be more impactful than you might think.”
In news that should not surprise anyone, the Baby Boomer generation controls most of the wealth in society. But the fact that demographic groups are rarely market segments should not be a surprise either.
Overall generational trends are usually not that important. Here is a graphic I created for a column earlier this year. Score: 1/2.
“Already popular in China, livestreaming commerce will be a new battleground for retailers and may bring community and entertainment to online shopping – elements it currently lacks.”
Nielsen Norman Group defines the practice as “a business model in which retailers, influencers, or celebrities sell products and services via online video streaming where the presenter demonstrates and discusses the offering and answers audience questions in real-time.”
To me, it just sounds like TV infomercials done over a new media format. (Quick, someone get Joey Tribbiani a Milk Master 2000 and a TikTok channel!) Still, Sprout Social reported that US companies such as Bloomingdale’s and Nordstrom have indeed started to do them this year. Score: 1/2.
Total score: 5/8 – 63%. GWI ranked the lowest in this year’s review, but it was competing in a very tough crowd.
In January 2021, McKinsey & Company described four general trends that will define ‘the next normal’.
“The return of confidence unleashes a consumer rebound: As consumer confidence returns, so will spending, with ‘revenge shopping’ sweeping through sectors as pent-up demand is unleashed.”
Optimistic people spend more and save less. Pessimistic people do the opposite.
According to data from the US Department of Commerce’s Bureau of Economic Analysis, consumer spending hit its lowest point in the second quarter of 2020 and has been rising ever since. Here is a basic chart that I created.
Here is the US personal savings rate (the percentage of income left after taxes and spending) from January 2019 to October 2021 from the Federal Reserve.
After a previous high of 17% in May 1975 during the mid-1970s recession in the US, the new record amount of savings was 34% in April 2020. Since then, people have saved less and less money (except for temporary spikes that likely corresponded with new waves of the pandemic) to the present day.
Score 2/2. Both the spending and the savings rates proved McKinsey correct. But we will see what, if anything, happens with the new Omicron variant.
“Leisure travel bounces back but business travel lags: People who travel for pleasure will want to get back to doing so. That has been the pattern in China.”
In November 2021, the US Travel Association released its updated forecasts for this year and beyond. Domestic travel – especially for leisure – has certainly returned. But international travel as a whole has not.
Score: 2/2. Still, I believe that international business travel will return more quickly than many think. The pandemic should teach marketers that people attend conferences for personal, emotional and engaging experiences – not just for the education. We can read papers or watch videos to learn many things, but the best marcom rarely happens on computer screens.
“The crisis sparks a wave of innovation and launches a generation of entrepreneurs.”
According to the World Intellectual Property Organization’s (WIPO) latest Global Innovation Index (GII) in September 2021, governments and enterprises in many parts of the world have increased spending on innovation despite the pandemic’s economic troubles.
The top five were Switzerland, Sweden, the US, the UK, and South Korea. Here are the US and UK.
Score: 1/1. Overall R&D investment grew 8.5% in 2019, according to some of the information in the GII. The top corporate R&D spenders increased the outlays by an average of 10% in 2020. Venture capital deals grew by 5.8% in 2020, and WIPO expects a higher figure for this year.
“Digitally enabled productivity gains accelerate the Fourth Industrial Revolution: Many executives reported that they moved 20 to 25 times faster than they thought possible.”
Labor productivity, also called output per hour, is calculated by dividing an index of real output by an index of hours worked by everyone.
This month, the US Bureau of Labor Statistics reported that 2021 Q3 labor productivity decreased 5.2% – the sharpest decline in more than 50 years. Moreover, that measure has been extremely volatile during the pandemic, with individual quarters jumping or plummeting.
Why? I’ve got a theory. Workplaces in various sectors with wide-ranging productivity levels have been affected by lockdowns and health regulations differently.
It all comes down to whether you can do your job at a computer all day. With all due respect to the marketing and media industries, most of us have had it easier. We can plop down at home or anywhere, open a laptop and work with relatively less effect on productivity.
But for everyone else out there who works, say, in warehouses or on factory floors, a global pandemic certainly affects their work and productivity levels much more. I am sure that nearly all McKinsey top executives are in the former category. Score: 1/2.
Total score: 6/7 -- 86%. McKinsey is a controversial agency because of some of the work the company has done for clients. But regardless of one’s opinion, the fact remains that these general 2021 predictions were almost entirely correct. McKinsey ranked the highest.
In July 2021, Zenith released its first advertising spend forecast for the year. This week, the agency told me their updated numbers.
“Global advertising expenditure will grow 11.2% [to $669 billion] in 2021, driven by exceptional demand for performance-led ecommerce advertising and brand advertising on online video.”
Zenith changed the forecast to 15.6% growth to $706 billion in 2021. Score? See the very end.
“Social media advertising will expand by 25% this year to reach $137 billion, overtaking paid search in scale for the first time. Paid search will expand by 19% to reach $135 billion.”
Now? Social media advertising and paid search are projected to be $149bn and $145bn, respectively.
“Zenith predicts that online video advertising will be the fastest-growing digital channel in 2021, rising by 26% to reach $63 billion.”
The new spend figure declined slightly to $62bn.
“Cinema and out-of-home were the worst affected by Covid-related restrictions, shrinking by 72% and 28% respectively, and will enjoy the fastest recovery in 2021, with respective growth rates of 116% and 16%.”
The new 2021 projected growth rates declined to 77% for cinema and 14% for OOH.
“Radio advertising, which shrank by 22% in 2020, is forecast to grow by 4% in 2021, while television fell 8% in 2020 and is forecast to grow 1% in 2021.”
December’s updated 2021 forecast showed larger increases to 6.3% for radio and 5.5% for TV.
Total score: You decide. Media planners should ponder if the variances between the projected and revised 2021 forecasts are significant and whether analyst firms should even bother with such early reports. Early numbers that are wrong can influence marketers to set the wrong budget priorities.
Still, I have not a prediction but a hope for 2022 – that we will all, like how WPP’s chief executive Mark Read has mandated, stop using the word ‘digital’ and that companies such as Zenith will create new terminology.
Take a billboard that uses digital technology to show ads and rotate between various ones. Is that ‘OOH advertising’? Is that ‘digital advertising’? Yes and yes. I watch YouTube videos on my smart television and see ads. Is that ‘digital advertising’? Is that ‘TV advertising’? Is that ‘video advertising’? Yes and yes and yes.
Personally, I care less about where ads run and more about what they want to accomplish. Most offline ads aim to build brands while most online ones focus on direct response (at least when I last checked in 2018) and there needs to be – on average – a 60/40 investment split between the two tactics.
‘Trends reports are astrology for strategists’
As I mentioned, I did not see a prediction of The Great Resignation in any of the trend decks and papers that I reviewed this year. That should give everyone a moment’s pause. As Group Think, a strategy community, tweeted in January 2021: “Trends reports are astrology for strategists.”
I must ask: did anyone even foresee the supply chain crisis as well?
Further, I have many post-coronavirus predictions that I have been collecting since early 2020. Here are two: Covid-19 will empty New York City, and we will never shake hands again. If and when the pandemic ends, I will do a special column that will rate everyone’s pandemic punditry.
In the meantime, I have a second hope. In 2022, I want companies to stop believing that brand purpose is either a panacea for all their problems or nothing but public relations. There is a middle ground where businesses can help both the world and their companies at the same time.
Have a safe and happy holiday, everyone. Hopefully next year will not also bring ‘interesting times’ that only Merlin could have foretold.
The Promotion Fix is an exclusive column for The Drum contributed by global keynote and virtual marketing speaker Samuel Scott, a former journalist, newspaper editor and director of marketing in the high-tech industry. He is based out of Tel Aviv, Israel. The column will return in January 2022.