2021 Advertising Shows Strong Optimism

2021 Advertising Shows Strong Optimism

2020 was a difficult year for virtually every industry, including traditional advertising. However, there is light at the end of the tunnel as we begin the New Year, as advertising spending in 2021 is projected to bounce back and show positive gains that lead the way for years to come.

A recent report from Magna shows that the U.S advertising market was one of the most resilient sectors from the downfall of COVID 19-related closures and budget decreases, showing just an average 1.5% decline in spend for 2020. Overall, spending is expected to rapidly increase in 2021 as many companies shift their focus to online commerce and retail efforts. According to Morningstar, online ad spending is expected to grow 20% in 2021 and a 14% average rate for 2022-24, outpacing the annual growth rates of 2017-19.

Looking at advertising trends by medium, the digital advertising outlook for 2021 is also quite optimistic. Magna forecasts an 8% year-on-year growth for digital spends of over $336 billion, bringing the medium’s share to 59% of total ad spending. In particular, increases in social media spending will be fueling this trend, as platforms gain more users and increase the lifetime value of each user. A study from eMarketer forecasts U.S. social media ad spending for 2021 to increase by 21.3%, reaching nearly $49 billion in overall spend.

These sizeable gains in online spending are in large attributed to online retailers increasing their advertising efforts to attract and retain long term customers and build brand reputation. According to research by Criteo, in recent months, 53% of consumers have discovered at least one form of online shopping that they plan to continue purchasing from.

Direct-response and digital advertising campaigns will remain at the forefront of marketing growth for 2021 and onwards, as first-party data gives brands useful insights into their customer’s behavior, identifying the path to maximize sales and recurring subscriptions. Social media platforms are also becoming much more efficient at targeted marketing and helping businesses integrate digital communications and robust payment systems that streamline purchases and customer experiences.

2021 will be the first year in history that digital advertising attracts more than 50% of global ad spend, a trend which is likely to only increase over time. Right now, it is more relevant than ever to ensure your business has an omnichannel marketing strategy that diversifies advertising spend to reach new customers and amplify sales. Contact us and see how we can positively impact your business for the New Year.

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Sources:

https://www.emarketer.com/content/us-social-media-advertising-in-2021

https://www.forbes.com/sites/bradadgate/2020/12/14/ad-agency-forecast-expect-the-advertising-market-to-rebound-in-2021/?sh=5d98a9806adb

https://www.morningstar.com/articles/1014195/digital-ad-spending-poised-for-exceptional-growth


The Impact of TV on Digital Performance

The Impact of TV on Digital Performance

Traditional television advertising continues to dominate, and in fact, has been shown to substantially improve the performance of digital advertisements by forming lasting impressions among viewers and building trust with your target audience. According to a report from Mediascience, television ads running concurrently with digital ads increases the average viewership time by 300% compared to running digital alone and leads to an increased brand recall from audiences by over 200%. The combination of TV and digital advertising also boosts purchase intent by an average of 15% among viewers.

The main reason television advertisements pair so well with digital is because TV ads produce a halo effect which validates and solidifies a brand’s reputation. This phenomenon causes digital ads to also be perceived as more desirable compared to without a TV presence, which makes digital seem more exciting and less intrusive than TV ads alone. From a strategic perspective, incorporating both digital and traditional TV advertising into your business is likely to increase performance by a larger percentage than either medium alone.

TV ads also bring a higher level of attention to branding, as a recent study from EffecTv shows that 94% of audiences watch the full length of TV ads, compared to only 78% of viewers watching full length digital ads. We also know that lesser known brands benefit more from TV ads than established ones, as well-known brands such as Target or Coca-Cola experience a diminishing return from a saturated market of television brand awareness, making it the perfect opportunity for smaller businesses to start casting a wider net with their marketing budgets.

According to a study conducted by TVSquared, television advertisements drive an additional 23% average weekly increase in website traffic while TV ads air. Conversely, when a TV advertiser goes off-air, they see a weekly reduction of website traffic by an average of 20%. Pausing TV airings can also reduce a brand’s visibility and awareness, which leads to lost opportunities of converting leads into potential sales.

Consumer’s trust in television as a credible source of new information makes it an essential factor in your direct marketing plan, as a solely digital strategy does not create the same level of brand reputation as combining the two. Mediascience also reports that TV ads are viewed on average more than twice as often as digital ads, so it makes sense that seeing an ad on both TV and digital will yield a higher level of audience interest and engagement.

It is essential for brands to develop a consistent TV schedule to reach their target audiences and attract new customers by running a wide range of different airings and channels. Building trust with customers has never been more important at a time such as this, utilizing the halo effect of TV paired with digital advertising will position your business to take full advantage of an omni-channel marketing strategy.

For updates on new market trends and industry insights, follow our River Direct Facebook & Instagram pages, and subscribe to our newsletter.

Sources:

https://www.facebook.com/business/news/insights/what-do-marketing-leaders-say-about-combining-tv-and-facebook

https://yousenditcc.s3.amazonaws.com/user7/The-Halo-Effect_TV-Drives-Digital.pdf

https://www.mediapost.com/publications/article/356159/ad-effectiveness-tv-plus-digital-significantly-ou.html

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