Top 5 Digital Advertising Trends for 2021

Digital advertising is defined as the process of buying ad slots on digital platforms with the goal of generating awareness, business leads and sales.

Common channels of digital advertising are search engines, websites, social media platforms, emails, digital out-of-home advertising (DOOH), podcasts and videos.

2020 has been a rocky year, although this pain excludes digital platforms. This is because digital/ online engagement rapidly increased due to Covid lockdowns that pushed most businesses to move their operations online completely or partially. This has boosted online SaaS products ecommerce and the need for online advertising to a whole new level. For instance, Google Meet, a video conferencing software increased its user base by 30X by Oct 2020. Facebook increased new users by 30% by June of the same year and video streaming services increased audiences by triple digits.

This means, not only are there more businesses with larger advertising budgets as they transition to a larger online presence, there are also more avenues and audiences online to target with products and services that meet their needs.

Let is now look at the 5 Key digital advertising trends that will shape 2021:

1. More ad impressions

According to a 2020 Wordstream report, Google Ad's ad impressions increased by double digits between March and May 2020, the time right after the lockdowns. This makes sense since now we have more users online. However, more impressions do not necessarily mean an increase in purchase intent and needs to be evaluated based on industry.

2. Increase in search and social media cost-per-click and its effects

With more businesses online competing for the same number of ad slots also translated into nearly 2X increase in cost-per-click, as per the same report cited above. However, if we are to believe the demand-supply economics, this also indicates that more businesses may drift to other platforms with niche audiences, such as publication websites, to fulfill their marketing and lead-generation needs.

3. Increased focus on page quality scores

Advertising platforms such as Google and Facebook depend on user engagement as one of the parameters besides ad bid, to decide on slot allocation. This is based on user experience best practices to ensure that their users see only relevant ads with an optimal landing page. This metric is expected to see increased importance, now that there already is an increased demand for their ad slots. None of the prominent search and social media sites, the biggest ad providers in this space, have announced any increase in ad slots, which only means an increased demand for landing page engagement figures.

4. Emergence of newer platforms

2020 was not just a diseased year physically, it was also a divisive year. Given that there was a large scale user ban across platforms, and is expected to continue - this in turn may give rise to a wave of newer social media sites, apps, publications and even search engines, that will aim to capture these users who may be digitally homeless for good or bad reasons. Depending on the economic value and spending capabilities of these user groups, newer platforms may become opportunities for brands and organizations.

5. Increased data-capture regulations

This may appear to be bad news but hold on. Recall the GDPR and CCPA governance in Europe and California respectively? They are still active and growing, and the result has not been bad. Yes, there is an increased layer of user permission for cookie tracking, email marketing etc, but this in turn has let to a reduced - but more intent-driven and qualified audience data for companies. We know from basic marketing principles that while every action may reduce users, that action is also a filter for user intent of purchase. For example, if a user fills out a 7 field form vs a 3 field form, the final list of conversions may be smaller for the 7 field form, but it also demonstrates the high interest of the user on the topic and their loyalty to the brand. These are key sales-readiness indicators.