Will AVOD and Retailer Media Lead the 2021 Ad Market?

BY Kathy Crosett
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Will AVOD and retailer media be the leading ad market trends of 2021? It’s too soon to tell. But those formats are attracting attention. Overall, 2020 has been a breathtaking year. The end result, according to analysts, may be that the cuts weren’t as deep as feared. And the projected ad market growth rates for 2021 look promising.

Zenith analysts predict the ad market will end 2020 with a 7.5% decrease from last year, globally. The resulting spending level will be $587 billion. Brian Wieser, at GroupM, predicts the global decline to be 5.8%. Even better, we can expect the global market to rise to $620 billion in 2021, or a 5.6% increase. It’s not until 2022 that the ad market will surpass the spending level achieved in 2019, which was $634 billion. 

The numbers are slightly better in the U.S. because of the political advertising that was done this year. While the U.S. ad market will likely drop by 5.3% drop in 2020, we’ll have only a 3.3% growth rate in 2021.

Marketers were quick to pivot to digital advertising formats as the pandemic spread. Globally, digital formats will account for 52% of total ad outlay this year. That’s an increase of 1.4% over last year and digital is one of the few formats to have witnessed growth. With in-​store sales threatened because of the pandemic, online advertising is working to bring consumers to retailers’ e‑commerce sites. Wieser notes that digital is strong because of “the unexpected pace at which digital’s small-​business-​skewed customer base expanded its spending.”


Consumers watched plenty of TV this year. In particular, they showed a growing interest in ad-​funded video on demand (AVOD) and that’s where advertisers are reaching them. Analysts believe this format will continue to increase because it offers three advantages:

  • High ad recall
  • High reach with young audiences
  • Tracking and targeting capabilities

We can expect this online consumer behavior to continue. The experts believe online video ad spending will average 8.4% annual growth rates in the next two years. Christian Lee, Global Managing Director at Zenith says, “Brands should use connected TV for both branding and performance.”

Out-​of-​home: Wieser predicts a return to slow growth next year, especially with larger brands spending more on this format.

Audio: Podcast advertising continues to increase and while the audiences may be small in comparison to what mass media draws, researchers note that brands can target niche audiences well.

Retailer Media

Another trend to observe is retailer media. When consumers shop on the site of a major vendor like Amazon or Walmart, brands have another way to connect with potential customers. Analysts point out that, “By promoting products at the point of purchase, it [retailer media] acts more like in-​store displays than traditional above-​the-​line advertising, and brands commonly pay for it from commercial budgets set aside for negotiating with retailers, rather than from marketing budgets.”

Specifically, vendors can pay for their products to be listed on Walmart or another retail site. One common arrangement is a sponsored product listed in a search. But as Elizabeth Marsten points out in a Search Engine Journal post, a vendor can explore other strategies such as working with “the Home Depot team on execution for a custom offering across TV, radio, social, digital, email and print.“

There’s plenty of buzz about retailer media this year, especially as digital marketers fret about the gradual disappearance of digital cookies. While a big retailer like Walgreens can promise advertisers access to their first-​party data, media buyers want to know, “What’s your real audience?” They likely won’t start buying on these channels until they see demonstrated value. You can get a jump on the digital presence of your clients by running a Digital Audit and sharing the results. The tool is available at AdMall from SalesFuel. Talk with your clients about exploring new ad formats including AVOD and retailer media.