12
Jan
2021

Commentary: What Advertisers Can Expect from Programmatic Advertising in 2021

01/12/2021

This article originally appeared in MarTechCube

By: Frost Prioleau, Co-Founder and CEO at Simpli.fi

The array of challenges in 2020 from COVID-19 served as a catalyst for businesses in every industry to reevaluate their operating procedures. While industry experts already predicted a strong growth in CTV advertising throughout 2020, COVID-19 caused it to skyrocket. With consumers spending more time within their homes and across multiple devices, CTV ad spend increased higher than expected due to a surge in connected TV streaming within households. While 2021 undoubtedly will have its own surprises, there are three distinct realities I see happening in the industry moving forward:
 

Advertisers will Require Increased Agility Across all Media Types

Over the past several years, digital advertisers have become accustomed to the flexibility that digital platforms offer. This “agility” has been especially valuable amid the COVID-19 pandemic as digital advertisers have needed to adjust spend, messaging, and creative on a moment’s notice in order to account for rapidly changing conditions in different parts of the country.

We expect advertisers’ requirement for agility will extend long past the COVID-19 pandemic, and that advertisers will increasingly challenge traditional media like linear TV, radio, and print to provide the same flexibility that digital platforms offer.

In addition to precise targeting and rapidly increasing scale, agility is one of the reasons that CTV advertising has seen such strong growth in 2020. In the past, linear TV advertising was typically associated with the “set it and forget it” budget approach, leaving little wiggle room for changes and saddling advertisers with limitations, especially when it came to targeting. In 2020, advertisers quickly moved away from the rigidity of linear TV advertising and have leaned increasingly on agile platforms, like connected TV. In 2021, advertisers will continue this trend, investing in digital platforms including CTV advertising, not only to reach homebound consumers, but to combine the flexibility and precise targeting capabilities of digital with the impactful storytelling of linear. Agility will be one of the most important pages in a marketer’s playbook in 2021.

 

Programmatic CTV Will Drive the Democratization of Television Advertising

Campaign minimums and the scale of campaign required to reach a reasonable number of households in an advertiser’s target demographic on traditional TV advertising has often been a deterrent for small and mid-sized brands and agencies to leverage linear television campaigns. However, advertisers of all sizes still covet reaching consumers via TV advertising. Connected TV provides for lower campaign spend minimums and eliminates waste by targeting only specific households either in an advertiser’s surrounding area, or nationwide. CTV advertising also provides direct attribution to website conversions and increased foot traffic to an advertiser’s location, providing accurate performance reporting even on small budget campaigns.

Because CTV advertising breaks down the barriers that have kept many small advertisers from marketing on TV, it will serve as a catalyst that drives the democratization of TV advertising with increased participation of advertisers of all sizes.

 

Performance Marketers Will Shift More Budgets to CTV Advertising

Performance marketers have long used linear TV ads to drive direct responses, often on late night programming or smaller cable channels. Likewise, savvy performance marketers were early adopters of CTV advertising and have seen significant ROI with CTV’s highly accurate targeting and attribution capabilities – whether it be in-store foot traffic or website conversions. CTV ads often give marketers the opportunity to reach specific audiences that are likely to convert at lower effective CPMs than cable TV spots, driving performance and a higher ROI.

As performance marketers lean into their digital strategies and allocate budgets for this non-traditional, e-commerce-focused holiday season, CTV advertising will play a significant role and will likely set the tone as the industry moves into the first quarter of 2021 and beyond.

While there is no guarantee of what is to come in 2021, this past year has set the stage for these themes to continue manifesting in the market. Now that advertisers have had the opportunity to see the benefits of the attribution capabilities and agility that CTV advertising provided during 2020, they will continue to invest more of their budgets moving forward.