By Ben Murphy, UK MD, Quantcast
The events of this year have had a significant impact on the UK’s advertising industry. The latest Advertising Association & WARC Expenditure Report has shown a glimmer of hope for the UK’s advertising industry, predicting a return to growth in Q2 of 2021. In addition, the report did show the hit the industry has taken this year with Q2 2020 being the worst ever quarter recorded for the UK’s advertising industry, contributing to a 14.9% dip over the first half of the year.
The knock-on effects have been far-reaching for agencies – from revenues to redundancies and even closures. For brands, the move to digital-first marketing strategies has gone from a five-year transition to one that happened overnight; some flourishing whilst others floundered.
With this year coming to a close, brands and agencies alike are focused on how they can recover and return to growth in 2021. One thing we all learned this year is to expect the unexpected – but we also learned that you can never be too prepared. For those putting together their plans for the next 12 months and beyond, having an understanding of what forces are shaping the future market will be critical to how they rebuild.
Here are three trends I see shaping the year ahead:
- Consultancy capabilities will unlock recovery for agencies
This year agencies have had to re-shape their organisations in light of the effects of Covid in the industry. Going into next year needing to make up lost ground, agencies will spend more time promoting their consultancy capabilities – across strategy, planning and creative. Agencies will also need to maximise what staff they do have. Automation will be critical for both; by investing in tools to streamline and automate aspects of execution, agencies can ensure their people can focus on strategic services without compromising on the quality of results they deliver. Critically, automation is the only way that advertisers will be able to respond in real-time to emerging micro trends, helping them outpace competition.
- Brands will battle for the attention of the silver surfers
Since the first lockdown back in March, we’ve seen growth in internet usage from the 65+ age group who arrived at the internet out of necessity and stayed for the newfound convenience. Bringing robust disposable income, brands will be fighting each other to win this new demographic over. With ecommerce more crowded than ever, but consumer spending still low, brands must invest time in getting it right. A granular understanding of the preferences and behaviour of this new demographic will be key, but be warned – don’t take too long about it or your competition will beat you to it. As we saw this year, those who paused their marketing and waited for things to blow over didn’t come out on top.
- The death of the cookie will split the ad industry
The impending death of the third party cookie will become more of a consideration in 2021 as brands rethink how they reach audiences online without it. It is likely we’ll see cookie-alternative solutions enter the market, such as Permisio which Quantcast launched this week. These solutions strive to protect journalistic integrity and consumer privacy, but unfortunately, it is likely that brands will be tempted to start diverting their ad spend to the “walled gardens” of Facebook & Google – making measurement across the funnel impossible. However, this on a mass scale would be catastrophic to publishers and spell the beginning of the end for free, independent journalism. As this unfolds, we’ll see advertisers recognise not only how much more valuable first-party cookie data is to a brand, but also their responsibility to help open internet publishers monetise their content. I encourage advertisers to get behind those innovators and industry bodies working to make this happen.
The year ahead poses many unknowns for digital advertisers and, after a tumultuous 2020, it would be easy to hope for a return to normality. However, with the internet changed – and still changing – irreversibly, those who accept and adapt to the new environment and are prepared for what’s to come will be best placed to thrive in 2021. One piece of advice for next year I will leave advertisers with, is look forwards not back. While the pandemic remains a huge factor shaping the industry, the death of the third-party cookie is coming and – if not tackled with an industry-wide approach – could change the face of the internet forever.