2021 in media: predicting amid the unpredictable
If 2020 has taught us anything, it’s that predictions are futile
Social commerce continued its rise, with the extension of shoppable ads to video formats. TV buyers continued to demand more agility and efficiency in campaigns. Closed ecosystems extended their reign of dominance as the organizing structure for media companies. And streaming platforms, having welcomed new entrants in the form of Disney+, HBOMax, and Peacock, had a banner year for viewership and progress in their new efforts at monetization.
Such trends are worth examining in closer detail. Their resilience through the crises of 2020 tell us that they will likely persist through 2021, no matter how tumultuous it proves to be.
TV advertising agility
Among the first major impacts of the coronavirus pandemic was that it upended the media calendar right on the eve of the upfronts. Many were first postponed or canceled, and then reemerged as a running calendar of virtual meetings, but not before brands pulled budgets and worked to back out of commitments. The programming calendar was thrown into disarray, too, as major live events like sports, the olympics, and awards shows were put on indefinite hiatus. With an uncertain economic outlook and unknowable programming calendar, agility and flexibility emerged as guiding principles for brands and networks alike.
Led by P&G, the largest advertiser by dollars spent, brands are now signaling that they’d prefer to buy TV on a more agile, ongoing basis in 2021 and beyond. This has big implications for media sellers, who need to update their systems to accommodate a new style of buying reminiscent of digital: opportunistic, data-driven, and measured on the basis of performance.
Closed ecosystems extending
Consumers consumed more media when under lockdown, and most of that increase in time spent was captured within the walls of closed ecosystems. Brands spent more time in closed ecosystems, too, as they concentrated their budgets on frictionless environments where they can target deterministically and easily demonstrate ROI.
The results are conclusive: closed ecosystems like Google, Facebook, TikTok, Snapchat, and Amazon — not to mention major broadcasters and streaming services with addressable ads and streaming in their portfolios — have proven much more resilient than other media companies in a time of disruption. Not only do they have an increasing share of consumer’s attention, they have the most premium supply and most granular first-party data.
The shift toward closed ecosystems was underway well before the pandemic, and the ensuing dislocation in the market only accelerated this shift and extended it across the retail and ecommerce space. For evidence, look at the advertising platforms being built by the likes of Target, Kroger, CVS, Walgreens, Home Depot, and Instacart.
In 2021 and beyond, brands must now solve the challenge of efficiently operating between and across closed ecosystems with a single workflow, a single audience definition and a unified standard for measurement.
TV streaming surges
Streaming platforms had a breakout year in 2020 on multiple levels. First, we saw the introduction of new offerings from the major broadcast giants; Disney+, HBOMax, and Peacock all launched during the pandemic. These services represent a tipping point in the distribution of premium content, with the majority of all TV ever created now available on demand and over the top. Second, there is just more streaming going on. By every metric, streaming has won the battle for media attention during the pandemic, and with the introduction of all this new streaming content, this is a trend we expect to continue in 2021.
Monetization looks different for these services than it does on linear TV, and that is likely to dominate a lot of the focus into next year. Ads are targeted with first-party data and bought on a more agile and opportunistic basis, but there are also fewer ads to buy. That’s because many of these services offer consumers more of a choice in terms of how they pay for the content, whether through subscriptions or through ads. And even in the fully ad-supported versions of these services, the ad pods tend to be lighter than with linear TV.
The rise of streaming prefigures a big challenge for cross-channel measurement. Nielsen announced its intention to combine TV and digital ratings into a single standard, but that is promised to take effect in 2024, leaving marketers with a critical interval during which they need to accomplish this feat themselves. All of this makes streaming a more high-stakes medium for advertisers, and it accelerates the urgency of adopting the science of operating between closed ecosystems.
Social commerce cometh
Advertising has historically been thought of in two main buckets: those designed to promote awareness and those designed to promote conversion. Brands are accustomed to segmenting their budgets into one or the other, buying and measuring them with different conventions and standards. Shoppable formats collapse this funnel by turning every advertisement into an opportunity for conversion. For ads that are traditionally designed for awareness - TV and streaming ads, in particular - this is a very big deal.
TV and streaming players like NBC made big strides with the introduction of shoppable ads in 2020. At the same time, TikTok, with its unique mix of interactive broadcast-style content, signaled that commerce was at the center of its monetization strategy by partnering with Shopify on a shoppable ad format. Facebook, for its part, launched Facebook Shops and in-chat shopping on WhatsApp, shortening the distance between awareness and conversion for the ads on its platform.
With an increasing share of all commerce taking place online, this is a trend that is likely to accelerate in 2021.
The year ahead: omnichannel and omnifunnel
As we look back with 2020 hindsight, the common themes are media convergence and integrated commerce. These trends will not reverse and the pace of change will only accelerate. The winning brands of 2021 will be those that have the platforms to operate seamlessly across channels and stages of the funnel. Put simply, marketers need to market the way consumers consume. And there’s no better time than the present.