It may seem fruitless to make predictions as the world continues to battle a pandemic and the uncertainty this brings with it. But as Campaign Asia-Pacific discovered in a feature yesterday (January 7), while Covid-19 has heavily disrupted many industries, adtech has remained resilient.
Indeed, the 2020 predictions that adtech experts made for the industry in January before the virus took hold all came to pass despite disruptions to global adspend. Covid-19 acted as an accelerant to many of the anticipated trends: social distancing propelled the growth of OTT consumption and adspend followed; the industry witnessed faster-than-expected growth of in-app; metrics came into sharper focus; and privacy was thrown even further into the spotlight.
Programmatic spend was hit by Covid-19 in the first quarter of 2020, when the majority of adspend was put on pause as marketers tried to figure out how to navigate the effects of nationwide lockdowns. But it rebounded astonishingly fast, particularly in APAC. For instance, PubMatic's Quarterly Mobile Index found that global mobile and mobile video spending fell in Q1 but largely returned to pre-Covid levels by Q2. Mobile video spend jumped 116% over pre-pandemic levels in Q2. In APAC, mobile spend lifted by 30% between Q1 and Q2 2020.
The digital advertising industry enters 2021 in a position of strength. Spikes in digital media consumption and ecommerce meant that digital advertising bucked global downturns across most advertising formats in 2020. As linear adspend fell by 18%, digital formats (search, video, social, banners) grew by 8% in 2020, lifting digital's share of global advertising to 59%, according to Magna's December report.
But with a bigger share of the pie, the requirement for the digital ad industry to address how it will operate in a stricter privacy environment is now critical. Apple's opt-in requirement for IDFA will come into force within the next few months, and Google Chrome will end support for third-party cookies by the end of the year.
It's perhaps not surprising then, that 'identity' is the most common theme to emerge from our experts' predictions for the adtech industry in 2021. In total, 10 distinct themes emerged from our eight programmatic experts, who cover the demand-side, supply-side, verification and digital agencies.
Identity and targeting
Juliette Stead, SVP of JAPAC, Magnite: "2021 will be the year that our industry replaces cookies with a consent-driven, scalable model that works across all supply types. The transformation of how user identification and privacy works in digital advertising has been underway for some time but we will see the results of these efforts in the next 12 months. A key part of this will be publisher-created and managed identifiers that are used in conjunction with first-party data to create segments. Open-source, community driven platforms like Prebid will help ensure new identity solutions are balanced and with the support of industry players, we have a good chance at creating an identity model that is future-facing, omnichannel, and equitable."
Niraj Nagpal, director of business development APAC, Iponweb: "A primary concern for everybody in digital will be the demise of the third-party cookie and the follow-through effects on campaign targeting, performance, and measurement. This will accelerate the shift to first-party data strategies, while also forcing brands, agencies, and publishers to invest in a host of new targeting and measurement techniques. Identity wars will escalate as major players—including Google, Verizon, LiveRamp, The Trade Desk, and prebid.js (to name a few)—compete for adoption and market dominance. Expect lots of trial and error and for some of these solutions to fizzle out fast."
Andrew Tu, managing director APAC, OpenX: "The upcoming death of the cookie is set up to be the defining issue of digital advertising over the next 12 months. There have been a lot of different proposed solutions, and it’s something that will impact marketers, publishers, adtech companies, and everyone in between. We don’t necessarily expect there to be any “clear winners” immediately, so our advice to marketers would be to try and stay up to date on the various proposed solutions and experiment with different options."
Laura Quigley, SVP of Asia, Integral Ad Science: "Since the days for cookies are numbered the industry will need to be ready for an overhaul of identity and ridding itself of old ways of targeting. Advertisers will need to look to drive relevancy for engagement and build on the foundation of a contextual targeting strategy. The IAS Ripple effect report suggests that seven out of 10 Singapore consumers hold brands accountable for the content that appears next to their ads, and brands need to take more control of where their ads appear. It’ll be a move towards relevance over targeting and hyper-personalisation."
Jordan Khoo, managing director APAC, DoubleVerify: "As Asia is still heavily driven by mobile apps, the impact of the elimination of cookies might be softened, though still significant. This gives more time for the industry to adopt efforts that support measurement and targeting, such as contextual advertising. Contextual saw major leaps over the past year, and is becoming an essential part of the future-ready ad ecosystem. In fact, our global research found that 69% of consumers are more likely to engage with ads contextually relevant to the content they are viewing. In 2021, contextual will break through as identity-based advertising is reformed."
Amir Rezaee, head of performance, Alpha Digital: "As we transition away from our reliance on automated audience identification (such as lookalike audiences, predictive targeting and extrapolated behavioural patterns), advertisers that are engaging audiences well within their own digital ecosystem (be it web, app, email) will understand who their audiences are, how to segment them, and how to talk to them. Publishers with universal logins are seeing big gains. It may have looked controversial a few years ago when many online news and BVOD networks added paywalls or forced logins, but those decisions are now bearing fruit. Expect this approach to soar this year, giving marketers more owned data sets to work with."
Samantha Pearlson, GM of client service Southeast Asia, The Trade Desk: "OTT will continue to grow—and grow fast. Our study with Kantar showed 73% of OTT viewers plan to maintain or increase OTT consumption even after the pandemic ends."
Khoo: "Given its ability to deliver an immersive, full-screen viewing experience for viewers, I believe CTV will continue its rapid growth. There are already numerous CTV and OTT streaming platforms in Asia and India, and brand advertisers will be increasingly shifting spend towards environments where their target audiences are consuming content. DoubleVerify’s 2020 Global Insights Report found that there was a 457% increase in the number of CTV video impressions in APAC. But quality is critical if advertisers are going to deepen their investment, and viewability standards must be established."
Stead: "Digital video in APAC will continue to see strong growth this year. In terms of viewership, 77% of internet users in Asia tune into digital video content, according to Emarketer. Marketers are increasingly shifting their focus to digital video as part of a more comprehensive multi-screen approach and honing their addressable strategies to better reach target audiences. Technology made for long form video advertising environments such as ad pods will be table stakes."
Shifts in metrics
Gavin Buxton, managing director Asia, SpotX: "With recessionary pressures impacting marketing budgets, brands are prioritising those channels that deliver results. OTT has been fully embraced during the pandemic and offers advertisers a compelling combination of audience scale and market-leading levels of CPCV, CVRs and viewability. However, these metrics will become table stakes in 2021 and advertisers should demand more tangible proof of effectiveness. Since the launch of SpotX's OTT brand lift study offering an increasing number of clients have seen their OTT campaigns drive meaningful top of the funnel awareness and consideration increases. That’s not to say OTT can’t deliver bottom of the funnel activation objectives—recent research showed that 38% of APAC OTT viewers bought online, purchased in store or redeemed a voucher after seeing an ad."
Khoo: "Current measurement technology leaves many video impressions either unmeasured or unprotected. While this problem is evident across all video, it is even greater in CTV and mobile app environments. This is due to the fact that these technologies aren’t widely adapted yet and blocking still isn’t possible. As we move into the New Year, we expect to see a greater demand for solutions that offer better measurement and brand protection across all video environments.
"In 2021, there will also be new opportunities for advancing performance metrics, which include privacy-friendly, impression-level media intelligence. Advertisers in APAC will be able to leverage solutions that look at metrics around ad presentation (eg time in view, ad share of screen, video quartile performance) and user interaction (eg ad, device, and browser touch events, scroll events, video playback, device orientation changes and much more). Such privacy-friendly solutions help inform optimisation decisions and drive ROI, and represent the next generation of performance intelligence."
Pearlson: "Attribution has always been important and will continue to be. With continued improvements in measurement and analytics, it will become easier for marketers to understand the true value driven by every partner in the digital ecosystem and to move away from the outdated 'last click wins' model."
Efficiency and in-housing
Nagpal: "Covid-19, as well as the Black Lives Matter movement in many regions around the world, highlighted the importance of being responsive to the moment. We saw many brands having to turn on and off media activity quickly in reaction to changing regulations and guidelines happening at the local level, and re-calibrate their messaging and creative overnight to ensure consumer respect and sensitivity. In addition, as budgets were cut in the early days of the pandemic, making sure every media dollar went as far as it could to drive real business outcomes became paramount. Brands will carry this mentality and cautiousness with them into 2021, planning media in shorter bursts and demanding far greater flexibility from their trading partners, and shining an even brighter light on supply chain fees, quality, and performance. This may lead some brand marketers in the region to take a more hands-on approach, bringing programmatic in-house or turning to a hybrid model in partnership with their agencies and trading platforms, as 84% of global brands have already done according to the latest WFA report, but only 50% of brands in APAC."
Quigley: "The challenges of 2020 highlighted the need for operational efficiency and consequently accelerated the drive to automation. In the media, the pressure of lockdowns saw this manifest with the increased reliance on programmatic media buying and a shift away from direct, IO-based bookings with programmatic facilitating more automated media buying. Given the losses sustained by businesses in 2020, 2021 will be a year of efficiency underpinned by automation. With less 'hands on deck,' adtech vendors will need to 'plug and play' into existing buying platforms or risk generating too high an operational cost for partners to deploy. Frost & Sullivan's research shows that companies recognise the business and operational benefits of automating business processes like data capture: higher productivity, leading to higher revenues. In a recent survey of almost 2,000 global IT decision-makers, it was reported that 72% have already invested in technology to drive and improve enterprise content and business process management as they try to reduce operational costs and improve the customer experience and their digital presence."
Stead: "We’re seeing publishers think about their businesses more holistically, breaking down the silos between programmatic and direct-sold inventory. Rather than competing between programmatic versus traditional sales, publishers can turn their attention to yielding the highest return for their inventory, regardless of how advertisers are buying it. Consolidating investment gives advertisers more efficiency, control and insight into their buys."
Quigley: "There are plenty of good reasons to be bullish about digital-out-of-home [DOOH]. With safety measures in place, people in the region are starting to get back to their routines—offices, restaurants, shopping, gym, and marketers are keen to get their attention. The DOOH channel is continually exploring new roads of innovation in creativity, delivery, and opportunity. With full-motion video, dynamic real-time content, social media engagement, mobile geo-targeting, multi-screen messaging, syncing and touch screen interactivity, augmented reality, and more. DOOH advertising rivals the innovation of every digital platform with the ability to reach consumers other mediums simply cannot. Contextual billboards can be tailored to the time of day, local weather, and even traffic conditions to get the attention. DOOH is poised to strike back in 2021."
OTT header bidding
Buxton: "Data enablement will be a priority in 2021. With the demise of the cookie, building out and implementing first-party data sets is critical if publishers and brands want to effectively understand, engage and give insights to their video campaigns. The surge in data-led audience activation will drive increased adoption of header bidding within OTT. Bringing the benefits seen in display, header bidding will give programmatic and audience-based OTT campaigns the best opportunity to deliver targeting that brands are looking for and maximise inventory monetisation for publishers. We have seen significant adoption in the US, with benefits to buyers and sellers. APAC markets are just getting started and we anticipate interest to increase significantly across the year."
Supply path optimisation
Tu: "SPO is not new, and this is a trend that started a few years ago, but I expect to see a dramatic increase in terms of the number of agencies and brands that undertake the SPO process. Our advice for marketers here is quite simple: it’s probably worth a look at who you are working with on the supply side, and building a list of preferred partners can prove quite beneficial. We think it’s great when marketers and agencies go through this process, and the more visibility the demand side gets around their supply partners, the better we’ll all be in the long run."
Nagpal: "With most people home-bound for much of 2020, growth in e-commerce and online spending boomed across the region, providing consumers with convenience, choice and value that will be hard to shake even when stores re-open fully. Brands that were already well positioned for the shift to e-commerce did exceedingly well, while those further behind spent much of the year playing catchup. Expect huge investments into e-commerce technology, experiences, and media activations by a wider group of legacy brands in 2021, including those that typically don’t have direct consumer access. Agencies and publishers, too, will look to build services and ad products that help brands with this new direct-to-consumer strategy. Expect media owners to invest heavily in affiliate programs, commerce-in-content, social commerce, and other new audience experiences that help brands to drive online sales."
Tu: "Prebid has taken off globally, and in the APAC market specifically, publishers are increasingly turning to prebid to manage their header bidding partners. Going into 2021, we believe publishers are going to look to take more control of their tech stack. Managed service solutions have been very popular so far, but we’re seeing publishers start to look for ways where they can be more hands-on themselves in terms of figuring out how to optimise their stack."
Greater creativity in programmatic
Buxton: "Video viewers in APAC want ads to entertain them and make them feel positive. When asked, they were less likely to skip if an ad was funny, has an interesting story and had feel-good content. Which acts as a reminder to the adtech industry that creative experience matters. With many marketers forced to pivot their ad strategies last year to reflect the mood of their consumers, we predict a greater focus on creative execution within digital video this year."