Top 3 Advertising Trends for 2021

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The year 2020 is one that will not soon be forgotten, a year many of us happily put in the rear-view mirror, and now we are looking forward with hope and anticipation for better things in 2021 (even if it’s been a rocky start).

Pandemic and politics aside, 2021 is shaping up to be a crucial year for digital publishing. Many of the themes we wrote about last year at this time will continue to be prominent, regardless of whether the impact of a global pandemic may have slowed or accelerated their progress through 2020. Privacy and identity conversations will take center stage as the demise of third-party cookies draws ever nearer. The spotlight will also shine brighter on publishers that can find the right balance in creating quality, engaging experiences for both users and brands alike.

So what are the crucial trends to watch in 2021? As a signal of their importance and the focus they’ll demand, we’ll outline just three.

  1. Chrome cookie countdown

    It’s been over a year since Google announced plans to phase out support for third-party cookies in Chrome, with a stated goal of doing so within two years. That means we are likely past the halfway point, and while there has been a lot of conversation about what alternatives might look like, a lot has yet to be determined.

    Even going back to 2019, Google was already putting forward a collection of proposals they referred to as the Privacy Sandbox, intending to evolve the architecture of the web with an increasing focus on privacy, while still supporting the advertising ecosystem.

    Ultimately, these proposals aim to provide alternatives for third-party cookies and solve for specific use cases in the industry (particularly for marketers) including fraud prevention, conversion measurement, and audience targeting — without being able to identify and track a user individually. And of critical importance, as we’ve already seen with Apple and Safari, the crackdown won’t just be on cookies themselves, but on fingerprinting-based workarounds that still undermine user privacy.

    For an explainer on Google’s Privacy Sandbox, check out our recent blog post here.

    Proposals in the Privacy Sandbox are now undergoing testing. Google recently claimed that cohort-based advertising (FLoC or Federated Learning of Cohorts) could be 95% as effective as cookies, although many in the industry raised questions about the lack of transparency into how that conclusion was reached. Google also announced that FLEDGE (First Locally-Executed Decision over Groups Experiment) will begin testing in Chrome soon. 

    In the meantime, a plethora of identity “solutions” are jockeying to achieve scale with supply and demand, working to convince publishers and buyers that their pseudonymous identifiers or user graphs can be viable solutions for the future. While Prebid’s User ID module now contains 20+ optional sub-modules, it’s quite likely that we’ll see some of these vendors and solutions fail as time progresses, especially if their value proposition is based on cross-domain cookies or other workarounds that browsers and privacy regulators are attempting to shut down.

    For any identity vendor or concept, publishers should consider a few key things: How viable will the solution be without third-party cookies or controversial fingerprinting techniques? Will enough buyers adopt the solution and start targeting on it for publishers to actually see an increase in revenue?

    Some publishers may benefit from integrating with solutions such as LiveRamp’s IdentityLink product, for safely and securely facilitating audience targeting on logged-in users. Other solutions, such as Prebid’s SharedID, can also help address audiences via first-party cookies. The Trade Desk’s Unified ID 2.0 shows promise in uniting major industry players, including LiveRamp, but it will likely take more time to see if it can solve for enough publisher and buyer use cases.

    We have high hopes for the efforts of Prebid’s Privacy and Identity Committee, and are also closely monitoring developments with other key industry working groups. We’ll be sure to share key updates regularly in our Ad Tech Roundup!
  1. Pagespeed performance pressure

    Optimizing for SEO and user experience has always been key for publishers that want to operate a sustainable and profitable digital publishing business. That’s true now more than ever, and Google has introduced Core Web Vitals to help publishers more easily identify and improve areas of their site that are impacting their search rankings and contributing to poor UX. 

    This past November, Google announced that page experience signals (including Core Web Vitals along with existing user experience signals) will start impacting Google Search rankings in May 2021.

    While Google states that Core Web Vitals may evolve over time, the current focus is on three primary aspects: loading, interactivity, and visual stability. In other words, search rankings will be impacted by how quickly a page loads, how soon the user can interact with it, and how much (or how little) the layout shifts.

    Of course, this means publishers will need to ensure that the architecture, layout, and content of their sites are optimized for these metrics — most of which isn’t specific to ads. But even on an otherwise perfectly optimized site, advertising certainly deserves consideration here too. Simply removing ads and advertising partners from the page may improve scores to some extent, but that’s obviously not an option for publishers that rely on the revenue those ads provide. So publishers will need to carefully consider their advertising strategy (including partners, formats, sizes, and layouts) as part of a balanced overall approach to UX that optimizes for sustainable monetization now and in the future.
  1. Data-driven distribution of dollars

    Lockdowns and stay-at-home orders due to the COVID-19 pandemic have only accelerated media consumption trends, influencing where and how marketers can target their desired audiences. 

    Digital media consumption was up significantly, especially for video, and on mobile devices. But traditional display ads (especially on desktop devices) are generally seeing performance decline in large part due to “banner blindness”. In other words, users have become so accustomed to seeing banner ads that the ads are often ignored and fail to generate the engagement metrics that advertisers would typically pay a premium for. Better fraud prevention, and policy enforcement like Google’s Confirmed Click functionality, also work to clamp down on malicious or accidental inflation of those metrics.

    Alternatively, high-impact, native, or video formats, can help to drive more engagement between users and a marketer’s ad. While increased engagement drives higher CPMs, these formats often require careful consideration for layout and implementation to actually achieve positive outcomes for buyers and minimize the risk of negatively affecting a site’s user experience. Even then, some users may not fully understand or appreciate the value-exchange of ads for free access to content or services, so those increased CPMs will have to be weighed against changes in user behaviour and traffic patterns.

    Web publishers would likely do well to borrow from trends in-app advertising, where formats like rewarded video are largely successful — the value exchange is more clearly understood by users and buyers get the engagement they want. By building advertising layouts and formats into their context experience, publishers can better navigate the trends in buyer spend and user behaviour to leverage high-performing ad formats within a positive user experience.

    As buyers are making more data-based decisions on where and how to spend their money, publishers should similarly evaluate how to implement and optimize a sustainable monetization strategy for their site. A/B testing and analysis can help with incorporating the formats and layouts that maximize revenue, while still delighting users and improving search rankings.

What can you do? 

We’ve covered the trends we expect to dominate the year ahead, but what can you do to prepare? Here are a few ways to start:

  1. Review your audience strategy and any existing partnerships you may have with companies that offer identity solutions. Your ad monetization solution can help ensure that the best options for your properties are integrated with both client-side and server-side bidders through our Prebid header bidding solution, while ensuring compliance with privacy standards.
  2. Review your site’s architecture, design, and layout to optimize your Core Web Vitals scores. Your ad monetization solution can assist you with identifying areas of your site that need improvement and finding the right strategy for improving search rankings while maximizing sustainable monetization.
  3. Align your content and advertising strategies with both revenue and user experience in mind. With the help of your ad monetization solution, test various ad formats and layouts to find the best strategy to benefit from the higher CPMs some formats offer, while maintaining a positive experience for your users.

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