Four key digital advertising trends in 2021

19 January 2021 | By Heather Eng, Sr. Marketing Manager

Every year brings changes in consumer behaviours, and 2020 was no different. Here, Frank Kochenash, President of Wunderman Thompson Commerce Marketplace Services, North America, and Lisa Coffey, Head of Agency Development, U.S., Amazon Ads, take a look at the biggest consumer behavior shifts in the last year, and what they mean for digital advertising in 2021.

Adapting to consumers’ new ways of living

Lisa Coffey: Looking back on the past year, what were some of the most effective consumer trends that arose?

Frank Kochenash: That’s a great question – starting with the customer and working backwards is a logical place to begin. There were several changes that we believe will be with us into 2021 and beyond.

The importance of omnichannel

Across our portfolio of clients, we’ve seen consumers seeking to purchase online, in addition to in stores. This was initially driven by limitations to physical stores caused by the early lockdowns. But we see continued – and we believe, sustained – consumer interest in having options to buy both online and in person, largely because of the next major trend.

Health and safety are priorities

Health and safety have become key buying considerations. This affects how products are marketed, packaged and sold. Customers still care about price, value and sustainability, but they’re now looking for information around health and safety, plus transparency around where and how the product was produced.

Adapting to a new way of living

Across our client base, we observed changes in buying that seem to indicate a shift to a new way of living. Sales in outdoor, home and garden, and sporting goods were strong. Also, somewhat anecdotally, back to school was as much about outdoor furniture to support student pods – with people buying desks, chairs and screens – as it was about paper supplies and clothing.

The convergence of brand and digital commerce

LC: How are retail advertisers driving towards sales objectives versus brand objectives?

FK: This year, I saw a lot of activity in sales-driven marketing – in other words, a shift to online and performance marketing. Clients were prioritising sales acquisition and seeking to gain sales share where they could, as people purchased more online.

Brand and digital commerce go together

That said, it’s been underappreciated how well brand and digital commerce complement each other. A strong brand is really important. From my point of view, being where consumers are and where they engage – on video, digital media and streaming services like Prime Video, Peacock and Netflix – are all opportunities to build brand. Some channels and activities such as digital media, browsing and shopping in stores have traditionally been thought of as sales-driven channels. But they actually offer a large brand-building opportunity, especially now with increased consumer interest in these activities. Brands looking for relatively safe places to promote the brand should consider the “point of sale”, especially digitally, as an opportunity to do brand, as well as direct response.

Taking a customer-centric approach to marketing and advertising

LC: You mentioned starting with the customer and working backwards. How have agencies and advertisers innovated on behalf of customers in 2020? And which of those strategies and tactics do you recommend carrying into 2021?

FK: The challenges of 2020 have spurred a wide range of innovations by brands on behalf of customers. We saw brands tune their messaging and packaging to emphasise what their customers were seeking. In online shopping channels, this meant making changes to product page content to emphasise, for example, cleanliness and safety features. We also saw many brands tune their advertising to empathise with consumers as they lived through lockdowns, social distancing, work disruptions and other hardships.

We also saw some companies innovate the brand experience. One campaign I found interesting, for example, was by M&M/Mars. Recognising that Halloween would be a completely different physical experience this year, M&M/Mars pursued efforts to try to bring some of the Halloween spirit into the living room. They sponsored a “Stream and Scream” event on Fire TV that was coupled with in-stream video shopping ads. They also sponsored an Amazon Live event five days before Halloween to inspire customers with in-home Halloween ideas to offset the expected loss of trick or treating and the usual parties.

LC: As we look to 2021, what does it mean for agencies and advertisers to take a customer-centric approach to advertising? How will they continue to improve the customer experience in today’s omnichannel landscape?

FK: Beyond some of the specific innovations I referenced, many agencies and advertisers changed their ways of working in the last year. I’ve noticed three types of change.

First, there’s been an increase in agility

In March, agencies and their clients held daily stand-ups together and focused intently on ruthlessly prioritised objectives. Those that have kept some of it up, and continue to do so, sustainably, will reap the benefits of being able to act and react faster than their competitors.

Secondly, many brands realised the value of resilience

Resilience is robustness, the ability of a system to withstand a disturbance. Redundancy is a common way to build robustness. Backup fulfilment, alternative selling channels and multiple manufacturer sources all build resilience. Unfortunately, they also increase cost. Nevertheless, resilience contains real value and 2020 proved that. In the finance world, “stress tests” are done to understand the resilience of, for example, a loan portfolio to economic shocks. I expect leading companies to develop similar types of measures, but the challenge for most will be absorbing the margin points needed to create these systems.

Lastly, is a new appreciation for empathy

Brands are used to assessing consumer needs and developing messaging that resonates, or communicating purpose-driven messages. But 2020 saw an increase in brands truly empathising with customers in their marketing. Often problem-solving starts with empathy. 2020 was a hard way to relearn this lesson, but I think this one will stick around.

Learning and iterating while thinking long-term

LC: As a final question, do you have any wrap-up thoughts for brands?

FK: OK. This is how I’d summarise my view of things:

Learn and adapt

New customers are being earned and new habits are being formed. Our clients are launching new products, similar products and alternative products, which matters because consumers have shown themselves to be willing to buy alternatives. If your goal is growth, now is the time. Lean into analytics to learn what’s going on and adapt.

Think long-term and make changes

This may mean investing in new products, new channels or new services. Acquisitions or divestments. It may mean building resiliency into your operations. But better to get on with it and control it than let external factors decide your fate.

And lastly, be safe

I don’t say this in a generic “let’s all do the right thing” sense, but in a specific business sense. It’s related to my resiliency guidance. I do think we will look at safety, especially customer safety and employee safety, in a new light for the foreseeable future. The companies that address this well will have an advantage over those that don’t. I believe that brands need to think similarly about how safety, health and robustness need to be built into their marketing and advertising plans, as well as their supply chain and distribution plans.