techgianttoimpactadmarket

Tech Giants to Impact Ad Market

During the many levels of lockdown last year, marketers regularly revised their ad budgets. In 2021, they’ll do more of the same and they expect tech giants to impact the ad market. To track trends in this industry, Cowen surveys 52 ad buyers in the U.S. Together, these buyers control about $15 billion in ad placements. Here’s what they see happening this year.

The pandemic will continue to impact the live event and trade show industry. With widespread vaccination not expected until later this year, marketers will move money into digital formats to connect with target audiences. One of those formats will be digital video. Globally, businesses will increase spending on the format by 15% every year for the next several years. The ad buyers in Cowen’s survey report that mobile video is “as effective as TV when conveying a brand message.”

The overall interest in and effectiveness of digital advertising will drive growth globally of over 18% this year. Some of that growth will be linked to catch-up from last year. At least six in 10 advertisers cut back on spending last year and “80% are still spending below normal levels.” In 2020, at this time, Cowen predicted a 16% increase in digital advertising (pre-pandemic).

The Amazon Impact

In addition, last year, Cowen’s research showed the big platforms potentially picking up another 2% of ad budgets through 2022. Analysts cited YouTube, Instagram and Amazon as the big platforms. In fact, up to 40% of ad buyers cited Amazon as becoming a ‘meaningful’ part of their digital budget.

This year, Amazon appears to have solidified its position with senior ad buyers. During the pandemic, ad investment on Amazon’s platform performed for marketers. This success means Amazon will likely account for 11% of digital ad spending from the surveyed group by next year, which marks a significant increase over the 7% level in 2020.  In terms of real dollars, Amazon is likely to bring in $26.1 billion in 2021 ad revenue, on a global basis. Ad buyers like Amazon because visitors to the site have good purchase intent.

However, ad buyers still spend the majority of their digital budgets on Google and Facebook. Google rules when consumers are searching for local vendors and that’s a detail your clients must keep in mind. Analysts also point out that Amazon is in a stronger position than Facebook regarding the general climate about using data to target consumers. With Apple making big changes on that front this year, Facebook targeting is seen as ‘at risk.’

The Apple Impact

Specifically, Apple will be asking app users to opt-in to ad tracking. When that happens, analysts believe Facebook targeting will be far less effective, especially for small businesses. In the end, Facebook could take a revenue hit of up to 3% because of the change

Marketers will roll out new branding campaigns this year. And the impact of new ad technology is clearly visible in terms of how marketers reach their target audience by age. For consumers aged 13–34, marketers rely on Instagram and YouTube. For consumers over age 35, marketers still like TV when they are rolling out branding campaigns.

Tech Giants to Impact the Ad Market

Remind your clients to use a balanced media mix when advertising. Show your value by tracking moves by the tech giants and remind clients that they may need to shift some of their effort from Facebook to paid search this year. You can get a snapshot of their online profile by running a Digital Audit on AdMall from SalesFuel.

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.