After an uncertain and industry-disrupting 2020, 2021 is looking better for the world of broadcast and digital advertising. As you more clearly define which advertisers to target, it’s always a good idea to look at the data. In this post, we’ll share insights on industries spending ad dollars in 2021.
What the Forecasts Say About Advertising Spend in 2021
According to Statista, there are some interesting forecasts for digital advertising spend in the U.S. Retail takes the top spot, which isn’t a big surprise. However, the category of financial services is in the No. 2 spot, which indicates a rise there. What’s behind that new number? We’ll dig deeper into this in a bit. Automotive still looks healthy, as well.
Is Ad Spend Growing?
After a year that saw major contractions in spending, experts expect some growth in 2021. Zenith Media forecasts a 3.2% rise to equal $237 billion, following a drop of 5.4% in 2020. Fueling the rebound is digital advertising, and Zenith expects the internet to capture 58% of U.S. advertising.
What Are the Trends in Ad Spend?
We can all agree that the pandemic changed the advertising industry. Where and how you place ads transformed mostly because buyer behaviors changed.
OTT and CTV on the Rise
First, consumers became big-time streamers, pushing the use of over-the-top (OTT) and connected TV (CTV) video advertising. This trend isn’t likely to fade, as more Americans cancel their paid TV subscriptions and instead rely on this avenue to consume content.
Accelerated E-Commerce Adoption
Americans spent $791.7 billion on e-commerce in 2020, up 32.4%! This increase is across the board and is not specific to age, location or preference. This was a forced adoption, but now that consumers have made it a habit, they aren’t likely to abandon this channel, even as they feel safer to return to in-store shopping.
It’s also important to consider that e-commerce purchases weren’t always via delivery. Buy online/pick up in-store (BOPIS) and curbside pickup were big winners for companies and consumers in 2020. They represent a big convenience to shoppers.
Tone Shifts in Messaging
Businesses learned to demonstrate empathy in their 2020 messaging. Connecting with their customers in this emotional way is good news. Consumers now expect this and don’t want to hear or view product-focused ads. They’d rather hear about how it’s going to improve their life.
Data + Trends: How to Target Industries Spending Ad Dollars in 2021
Next, let’s look at some practical takeaways to target industries spending ad dollars. We’ll look at retail, financial, consumer products, telecom, consumer electronics and automotive.
Retailers are evolving and realizing they need to provide an omnichannel experience. Physical stores will likely close in 2021 while e-commerce efforts increase. The retailers in your area may be going through a business model transition, so it’s vital to offer them sound ad ideas to help them connect with the changing consumer.
- Encourage use of OTT/CTV videos to highlight in-demand products, BOPIS and curbside options, free shipping, and the value of in-store shopping (i.e., in-store only deals, giveaways, etc.).
- Bundle an integrated advertising option that includes digital, TV and radio and focuses on specific promotions or branded messages with an emotional connection. By advertisers leveraging all three mediums, more consumers will see the ads, and the business will remain top of mind for them.
- Use location-based ads to reach customers that are nearby and/or previously visited the store. These types of ads are good for luring consumers away from competitors. Ads can demonstrate why the retailer outperforms the rest.
The financial services industry was a spender during COVID-19 for several reasons. Interest rates remained low, consumers wanted to pivot investments, and many customers adopted digital banking habits. Their spending in 2021 will likely continue to focus on these areas. With the economy recovering and the real estate market still hot, financial institutions are likely to promote mortgages and saving plans.
- Targeted display ads can deliver ROI for your financial advertisers. By specifically defining who sees the ads based on demographics that fit their ideal buyer, banks can attract more customers.
- Geofencing is a way to target based on location. You could use this concept to focus on those closest to the area, which makes sense for credit unions and community banks. Messaging about being part of the community and offering low interest rates on loans or refinancing could be impactful to locals. Positioning these banks as a better alternative to the big players is a relatable message to many.
Manufacturers of consumer goods don’t typically spend on local advertising. However, there are specialty goods that can benefit from your offerings. Take bike shops, for example. Bicycle sales were booming during COVID-19, and experts believe this will continue. Any other consumer goods that have local channels are ripe for spending ad dollars.
- OTT/CTV works well for this category because they are physical goods that consumers want to see and experience.
- TV ads would also help customers visualize the products, and shops can advise on how to buy from them, whether in-store or virtually.
- Display ads on local websites could also be a fruitful channel. Using specific discounts or codes may lead to new business.
Telecom is another industry that’s continuing to advertise to consumers. With people working and learning from home, internet connectivity and increasing bandwidth are critical. Those in telecom are seeking to get customers to upgrade, so they don’t have slow connections or cut in and out on video calls.
- Geofencing will be a no-brainer for telecom since they can only offer services in certain areas.
- OTT/CTV is also a good channel for telecom since consumers are literally using the product to access this. Simple and direct messages about faster and better connectivity will make a strong impact here.
Just as consumers want faster internet, they also want the latest technology, including smartphones, tablets and laptops. Research indicates that consumer electronics revenue increased by 17% in 2020, to $199 billion. With new products debuting and the constant urgency around upgrading, sellers in this market have an opportunity to win customers.
- OTT/CTV is an ideal channel for consumer electronics. Short videos can describe how they work and what makes them purchase-worthy.
- Digital display ads, especially retargeting, can target specific users online that visit store websites but fail to make a purchase.
Car dealerships were another vertical that continued to spend in 2020. Many factors in 2021 created low inventory for both new and used cars. Consumers purchased cars to avoid public transportation, and fewer people traded in their old vehicle for a new one. As of Q1 of 2021, new inventory is down 27% YOY, while used is down 13%.
Dealers have reason to think 2021 will be fruitful, with stimulus money and lower unemployment. That means they’ll want to reach consumers.
- Direct consumers with digital displays ads and OTT/CTV videos to the dealership website with messaging about the features that allow customers to “shop from home,” such as comparisons, better imagery and processes that are completable online (i.e., applying for financing).
- Suggest radio and TV spots that focus on service offerings. They often provide a high margin for dealerships. Messaging can include convenience, like drop-offs that eliminate contact. You can also suggest seasonal messages, as drivers will likely take more road trips this year since other types of travel aren’t fully available.
The Right Message to the Right Vertical
As an ad sales professional, you know that timing is everything. These tips to focus on industries that are spending money could help you retain, expand or grow your book of business. With a variety of tactics available, you can deliver ROI to your advertisers.