The landscape of advertising increasingly becomes more challenging. From consumer privacy concerns, to the burgeoning podcast and OTT industries, to trying to compete and survive in an ongoing COVID-19 world, advertisers and the MarTech vendors they rely on face more challenges and lots of opportunity in 2021.

Here’s a rundown of performance marketing trends to watch for in the “year after a messy 2020” as advertisers look to garner the best return on their hard-earned dollars:

1. Third-Party Cookies are Being Restricted; Apple’s Consumer Opt-in Changing the Landscape

The days of third-party cookies tracking everything – those placed by a vendor or agency on behalf of a client website domain to capture customer data – are numbered. MarTech Vendor X will no longer have the same level of resiliency and tracking that advertisers have come to rely on. Privacy laws, such as Europe’s GDPR and California’s CCPA (and the even-tougher 2020-approved CPRA) have put businesses on notice. If you don’t follow the regulations regarding consumer data, you can’t do business in the region.

Apple’s delay of its opt-in privacy requirements – part of the release of iOS 14 this fall – means a bit of a reprieve until early 2021 it appears for app publishers like Facebook, Snapchat, and others. The bottom line is that Apple wants to give the power to the people to allow (or not) access to their mobile Identifier for Advertisers (IDFA), which gives advertisers the ability to accurately target and measure their marketing campaigns. This is related to Apple’s Intelligent Tracking Prevention (ITP), initiative first launched in 2017, an effort to protect user privacy by limiting the ability of marketers and online businesses to track users across domains via its Safari browser.

All is not lost. The answer lies in tracking pixels placed by the companies on their own servers, so cookies are indeed first party.

Nearly all businesses rely on their cookies to provide an exceptional user experience, including maintaining personal preferences, login credentials, etc. Consumers want their privacy, but they also want the companies they do frequent business with to remember who they are and to provide a smooth and easy experience, along with a level of security they can trust.

For mobile applications in the Apple App Store, the solution is to provide real value via apps with which consumers are willing to share their data. No longer can app developers rely on a bait-and-switch tactics to covertly collect and sell consumer data (we’re looking at you, weather.com). Expect the App Store to be cleaner, more transparent and provide better experiences to consumers. 

2. Collaborative Marketing and Attribution for Ecosystems

With cookies and third-party tracking being limited or all-out banned in the New Year (see item No. 1 above), partners that work together in their networks are going to succeed. It’s all about collaborative marketing, and nowhere will that be more prevalent than in ecosystems consisting of marketplaces – network owners collaborating with their end-of-the-line partners to promote, advertise, and sell goods and services.

Ecosystem attribution – an offshoot of impartial multi-touch attribution – will enable partners on both ends of the network to see, with unbiased transparency, what marketing touchpoints are contributing to the customer’s journey on the road to conversion. Ecosystem attribution – in which a pixel placed by the marketplace on its website, as well as by each of its partners making the final sale – will provide a lens into which marketing channels are most effective.

This not only gives credit where it is due (if the marketplace had a hand in starting the customer journey, for instance), it creates trust among partners within the network and contributes to the overall health of the larger ecosystem of marketplaces, their networks, and the two-way partnerships.

Keep an eye out for “ecosystem attribution” in 2021, and notice by year’s end, if not earlier, how much that term pervades the MarTech industry.

Warning: If you are selling an advertising product across a network, you might see your ad revenue decline if you can’t provide accurate attribution measurement. Advertisers are demanding attribution, and if you can’t prove your worth, expect those ad dollars to flow elsewhere – to ad sellers with solutions that can provide accurate measurement.

3. Ad Networks Will Continue to Buy Up CDPs

In an effort to help marketers reach out to prospects and customers, and garner more views of their messaging, ad networks such as Google Ads and Facebook Ads will continue to integrate with – or simply buy up – Customer Data Platforms (CDPs).

CDPs are marketer-managed platforms that provide detailed information about customers by examining multiple data sources. Ad networks want insights into the full customer journeys, from top-of-funnel awareness to bottom-of-funnel conversion, with the goal of helping customers move seamlessly from discovery to purchase.

It will be interesting to see how further integration of CDPs by the Google and Facebook ad platforms of the world affects, if at all, how advertisers use Demand-Side Platforms (DSPs). Typically, DSPs offer marketers more reach with access to multiple networks across the web, while ad platforms target and display ads within their own specific networks.

By combining customer information from a CDP with the reach of ad platforms and DSPs, marketers can launch audience-specific campaigns driven by data. Insights from attribution data will be key to driving marketing performance.

4. Meteoric Growth of Podcasts and OTT Won’t Slow Down

The rocketing growth of podcasts and over-the-top (OTT) channels will continue in 2021, meaning marketers will need to meet consumers where they are and measure the impacts of advertising on those channels. OTT and podcast providers are seeing their ad inventories being gobbled up as the demand for their programming continues to increase.

Spotify bought Megaphone for a reason – Spotify was out of ad space; Megaphone, the podcast-hosting company that also inserts and sells dynamic adds for podcasts, has ad capacity. Already a power player in the streaming of podcast content, Spotify is setting itself up to rule podcast advertising, becoming the main ad seller for podcast content inside and outside its network. This will not only upset the teacart of who advertises where, when and how, but Spotify will have access to listener data – again inside and outside its own platform.

Old-style static podcast ads that sat inside podcast programming on a loop are being replaced by dynamic advertising that can be updated and switched out based on listener habits. But to have the right listeners hearing the right ads at the right time takes mindful and unbiased use of listener data. Hosting services could tell advertisers where their audience was listening, from which device, and on what app. It’s not enough.

Spotify changes the game with access to names, billing information, location, age, programming preferences, devices used, and more.

Is it Google- or Facebook-level data? Not yet. But Spotify can take its 2020-launched capability to insert ads based on listenership on its platform and implement that technology outside of its own network (hence the Megaphone deal).

Spotify stands to gain a lot as advertisers seek to reach its 320 million monthly listeners. Now, Spotify owns the distribution rights to Megaphone and all of its programming, so advertisers can either contact their Spotify ad sales rep to reach its audience or choose to host a podcast on Megaphone so it can insert streaming ads on its programming.

Regardless, competition for advertising space means ad pricing will continue to go up – just look at Facebook and Google’s rising ad pricing. Measuring the effectiveness of podcast and OTT advertising is more critical than ever, and MarTech vendors specializing in multi-touch attribution are at the ready to provide data to advertisers now opting for these offline channels. The days of digital-only advertising aren’t over, but watch for a wave of ad dollars shifting to these non-digital offerings. Advertisers will demand proof of performance on these channels.

5. Web Lift Alone Won’t Cut It Anymore for Radio and TV Advertising

Web lift by offline channels such as broadcast radio advertising was once a fine measurement of the effectiveness of those ads. But savvy radio broadcasters will succeed by embracing multitouch attribution (MTA) and educating their sales teams to its powerful insights – as all major U.S. broadcasters have.

The value in showing advertisers “what happened after their radio ad created consumer awareness” on their way to conversion is solid gold.

Look to more radio advertisers demanding MTA measurement – not just point solution, single-channel-focused attribution – and putting its data and insights to use in 2021.

Similar to Ecosystem Attribution, if broadcasters can’t provide bottom-of-the-funnel conversion tracking and attribution, we expect those advertising dollars to shift toward broadcast mediums that can provide accurate measurement. See our podcast and OTT trend (No. 4) above.

6. 2020’s COVID-19 Disruption Proves Businesses Need D2C Strategy to Survive

For businesses of all kinds who were already embracing digital channels to reach consumers before the pandemic hit, they quickly thanked their lucky stars they had done so. For marketers who had not yet made the transition to digital outreach, COVID-19 was a rude awakening.

Asleep no more, businesses who want to thrive, not just survive, in 2021 will need to embrace a direct-to-consumer mindset and marketing strategy. Take brands that pioneered DTC success, for instance, including Warby Parker, Casper, Purple, Carvana, and Airbnb. They truly disrupted their industries, eliminating the barrier between themselves and consumers, giving them control over their brand, reputation, marketing, and sales tactics.

There’s no reason a furniture retailer, a niche flavored-popcorn company, or even a high-end maker of fine alcohol spirits – any business, really – can’t take a page from the companies listed above and make it easier for people to find them, learn about their products, services and solutions, and buy from them. The New Year, as 2020 did, will require this new mindset.

7. Incrementality – A Great Idea in a Vacuum; Very Difficult in Practice

You will hear about the value of “incrementality” from vendors who hang their hat on it, but unless you have the resources, time, and scientific approach to toss at deploying incrementality correctly, there’s no guarantee of getting the statistically relevant results you are after. Besides needing a control group – basically eliminating one channel to see how marketing campaigns perform without that channel – accurate measurement is affected by other factors.

Those include seasonality, geographic region, offer or promotion type, spend/impressions shared, and what the competition is doing when the “control” is on. If you are not Proctor & Gamble, or a business of that size, incrementality is likely not in your 2021 forecast of advertising measurement tools.

Incrementality may be worth considering but getting the data to the ideal state needed will take a lot of time and effort. You may not have the luxury of waiting for results when you need to act and react in real time to ensure marketing campaigns are firing on all cylinders and dollars spent on advertising are being directed to what is working and away from what is not.

Warning: before you set out on a long and arduous journey of incrementality, make sure the juice will be worth the squeeze.

You may not find any insights above and beyond your current attribution methodology. Results may vary.

8. Point Solutions Will Likely Become Free Tools

Just as Google offers its Google Analytics tool free, point solutions that focus on attribution of a single marketing channel are likely going to end up on the free pile, as well. It’s the natural evolution of marketing solutions too narrow in focus.

As marketing attribution moves up market and solves harder, more complicated data issues, advertisers want to know more than just how a single channel is performing. They want a cross-channel view to show the effectiveness (or not) of their ad spend. Point solutions may no longer be able to charge for the limited scope of data they provide because in the end, the performance of that one channel doesn’t operate in a vacuum. It operates in conjunction with all the other channels.

Products that were once expensive – and at one time proved worthy by looking at, say, just radio advertising or just podcast ad performance – will likely be offered at no cost.

Even multitouch attribution vendors will give away a free point solution, knowing it’s a foray into an advertiser’s desire to see a complete omni-channel picture of its marketing efforts (and full-product offering).

Warning: If you rely on separate tools to measure separate channels, you are by definition not seeing the big picture, and your insights are compromised.

9. More Vendors Will Offer Bolt-On Attribution Solutions

Multitouch attribution is here to stay and continues to grow in popularity. It’s a necessity, really, for advertisers to survive, compete, and win. Impartial MTA has crossed the technology chasm, and early adopters are barreling ahead of their marketing attribution competitors armed with data and insights that laggards are now learning they need to have.

Some MarTech vendors have already acquired an attribution tool or bolted on an ad-tech solution to their existing core business offerings.

Expect this bolt-on strategy from more and more vendors in 2021, as their clients demand attribution to measure their advertising effectiveness.

Just remember, it’s not their niche and rather an attempt to join the attribution party and appease clients thirsty for the data they want and need. You will get what you pay for.

In Conclusion

Just as the pandemic threw a huge wrench into what was expected to be a bustling 2020 for advertisers and their businesses, expect these 9 New Year trends to define the success of performance marketing. Use these trends to avoid pitfalls and give yourself a leg up – at least a heads up – to increase marketing performance in 2021.