The 2020 calendar year has brought a lot of unexpected change. Even as the pandemic has reshaped daily life for most Americans, innovations and shifting consumer behaviors have changed the advertising and marketing landscape across many different industries.
Smartphone usage and TV consumption are up. Mobile payments, health tracking wearables, and TikTok have exploded in consumer adoption. People are shopping online more than ever, and ordering takeout like never before. These evolving trends don’t just define 2020: They offer a lot of insight into what to expect in the year ahead, especially when it comes to advertising and marketing.
Looking for the latest word on the top 2021 advertising trends? We’ve got you covered. Here are four things local businesses should know as you plan for 2021:
1. Media Consumption: On the Rise, and Here to Stay
By 2021, the Internet will account for more than half of all total media consumption. This consumption includes not only browser-based media consumption, but also media made available through mobile apps, streamed to smartphones, and even streaming and other digital video options available through your cable service provider. And 54 percent of those adults say they’ve recently learned how to make better use of the features on their smart TVs and other devices.
The pandemic triggered an increase in streaming service consumption for U.S. consumers. Eighty percent of American adults now pay for streaming video, an increase from 73 percent prior to the pandemic. Fifty-five percent of consumers now watch online video on a daily basis. Experts predict that by 2021, the average U.S. adult will be watching up to 100 minutes of digital video every day.
2. Consumer Interests and Behaviors are Changing
The rise in media consumption has also seen changes in how consumers seek out content—particularly emerging types of media and streaming services. Today’s consumers are more flexible and open-minded regarding where and how they find media: 66 percent of adults, for example, are open to trying out new types of media than their traditional viewing and consumption options.
As digital video consumption has increased, U.S. households are looking for budget-friendly options that offer quality, affordable video content supported by ads. Deloitte reports that 47 percent of consumers have recently tried at least one free, ad-supported video streaming service as they look for affordable ways to expand their content options. Among the crucial demographic of 25-to-34 year-olds, 38 percent have increased their viewing of ad-supported video-on-demand (AVOD).
This rise in digital video streaming has surpassed prior forecasts of how quickly consumers would adopt streaming services in their homes. Market research experts have revised their end of 2020 estimate for U.S. subscription video services from 192.7 million households to 207.5 million—15 million more than previously anticipated.
Video isn’t the only type of media drawing increased consumer interest. Podcasts and digital audio have continued to draw larger audiences, thus increasing advertising opportunities through these emerging channels.
3. Advertisers Embrace New Digital Channels and Customer Priorities
Podcast ad revenue is expected to clear $1 billion annually for the first time in 2021. Experts are forecasting a 35 percent rise in digital audio revenue in 2021, highlighting the boom in audio ad opportunities beyond traditional radio. Businesses with a background in radio advertising now face better incentives to create ad spots that target digital listeners as well as traditional airwave audiences.
While overall social media participation among U.S. consumers has been relatively steady, one notable change over the past year is the rise of TikTok, which now boasts more than 65 million monthly users in the U.S. alone, particularly among younger demographics. As TikTok expands its ad opportunities, other social networks are trying to stay ahead of the game by adapting their experiences and ad options to rival TikTok’s offerings—which is likely to lead to new social ad products for businesses to choose from in the coming year.
Meanwhile, the pandemic and other events of 2020 have conspired to shape the types of ad messaging that best resonate with today’s target audiences. The disruption created by the pandemic has increased consumer inclinations toward nostalgia. At the same time, social issues that have come to rise are pushing more consumers to make purchasing decisions that align with their values. Both of these messaging strategies are expected to take a prominent role in shaping ad messaging in 2021.
4. Marketing Money Will Be Used to Spur Economic Recovery
After hitting pause or cutting back on advertising and marketing during the initial COVID breakout, many brands have since returned to regular advertising. Some are even increasing their spending or launching their first TV campaigns to jump-start their recovery from the economic disruption brought by the pandemic.
As a revenue-generating activity, businesses are looking to advertising and marketing budgets as vehicles to drive recovery and growth in 2021. Even in the first half of 2020, 110 new TV advertisers accounted for more than $450 million in spending. More recent analysis of brand marketing has shown that increased spending contributed to an average 70 percent increase in ROI vs. brands who either maintained or decreased their spending.
The economic recovery of the pandemic-triggered recession is likely to reflect the recovery that took place following the 2008 recession. During that economic downturn, 38 percent of businesses that increased their marketing spending enjoyed significant profit growths during a period of overall economic stagnation. When marketing drives more revenue than the cost of those campaigns, it makes sense to increase your spending and invest in a stronger financial future.
While the events of 2020 have been anything but expected, the insights and trends developed over this past calendar year are likely to drive continued trend-setting and growth in the year to come. Build an advertising strategy that takes advantage of these opportunities before your competition catches wind.
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