Digital media industry trends, January & February 2021

We’re excited to continue our digital media industry trends series into a new year with a new monthly format with more industry analysis, insider tidbits, and resources than ever!

In this edition, you’ll find:

• A quick review of January RPMs and ad spending
• Some fascinating advertiser spending trends we’re seeing unfold
• Seven macroeconomic trends that may impact ad spending throughout the year
• Why publishers shouldn’t get too hyped about Google’s FLoC announcement just yet
• A heads up on Google’s mobile-first indexing headed our way in a few weeks

Advertising trends

We’re just about a month into the new year, and so far it’s what we expected. RPMs are up year-over-year, slightly, with the end of January looking better than the beginning. 

By a quirk of calendars, this year started much more slowly than last. Last year, January 1 was a Wednesday, with advertisers back in the office on January 2 and restarting their ad campaigns before the weekend. With New Year’s Day falling on a Friday this year, the long holiday weekend delayed things by a few additional days, but advertisers began making up the difference a little later into the month.

We’re cautiously optimistic for the rest of Q1 as the trend is moving in the right direction, and the rollout of COVID vaccines should propel advertiser exuberance over the coming months. 

If the US government approves more stimulus, that announcement will encourage brands to spend more on advertising to capture the fresh money flowing into household budgets. Then, as consumer dollars flow into the advertised goods and services, it will lead to more advertiser spending to nurture that relationship with consumers. 

Some fascinating advertiser spending trends we’re seeing unfold

In January, we saw many advertisers demonstrating continuity and stability, despite the ongoing uncertainty of 2021.

We compared the first three weeks of January this year, to the first three weeks of January 2020, to understand if and how the advertising landscape is changing, and what this might mean for the rest of the year.

We found: 

1. Lots of repeat advertisers are spending on CafeMedia sites. Of the top 100 advertisers by spend so far this year, the majority were also top spenders this time last year. It’s a welcome consistency that demonstrates advertisers’ confidence in digital advertising and the high-quality audiences they can reach through CafeMedia publishers.

2. You can definitely still see COVID’s influence on advertiser spending. While performance was strong across multiple categories, outperformance in some areas compared to last year reminds us that we’re all still trying to social distance. 

Brands that are keeping us connected, fed, and cozy (telecom, tech, food delivery & quick-service restaurants, and home brands) saw the most growth in spend compared to this time last year.

3. Small businesses are spending more this year. One of our favorite discoveries was seeing this strong spend not just among the largest advertisers, but also among small businesses! 

On a relative basis, we’re seeing small businesses invest almost 3x what they were last year at this time. We’re loving that small businesses are turning to other small businessesto make deeper connections with customers.

Looking further into 2021, macroeconomic trends predict the future of ad spend

Current estimates predict that the majority of the US will be fully vaccinated by mid-year. As a result, many financial institutions are predicting a major consumer rebound in the second half of the year. 

Once the world starts opening back up again, here are some major trends we expect to see:

1. People making up for lost time. Whether it be called the “YOLO economy” or even “revenge shopping”, once people are vaccinated and businesses are able to reopen fully, consumers are expected to be extremely enthusiastic to purchase and participate in experiences they have been denied for over a year. Dining out, entertainment, and domestic travel are likely to see a huge resurgence upon vaccination rollout.

2. A tiered bounceback. Keep in mind though, consumers are still likely to be cautious so outings won’t immediately return to pre-COVID rates. These changes will probably come in spurts. For example, while local and domestic leisure travel is likely to see very high demand, international and business travel are not likely to see a high bounceback rate this year. 

3. A shopping resurgence. Experiential and communal businesses aren’t the only areas we’re expecting to see growth. Shopping and consumer goods purchases are projected to increase later this year. Many have been saving and being more careful about their expenditures over the last year. Once people feel more optimistic about the future, some predict splurges on those purchases they’ve been holding back on. As a result, we may see advertisers ready to hop on this trend and spend more on advertising later this year. 

4. Digital acceleration. We’ve seen an extraordinary acceleration in technology development and adoption. 2021 will hold continued growth for tech, especially solutions for remote working and learning as well as virtual events and community platforms. From online retail offerings to online grocery shopping, more and more people are embracing digital solutions. Many institutions expect this trend to continue into the year ahead with increased interest in 5G, virtual reality, education tech, SaaS (software as a service) solutions, and more. As the world re-opens, people are likely to incorporate a new hybrid of online and offline experiences into their life. We’re hopeful this means we’ll see a slight residual increase in publisher traffic coupled with more confident advertiser spend in the latter half of the year. 

5. Taking a stand. We’re seeing “purpose” and “intention” as common themes across market reports, getting to the heart of transformation for society, business, and individuals. Consumers expect brands and businesses to take a stand for things that matter to them, from human rights and diversity to sustainability and giving back. 

6. Rekindled community: According to GFK, isolation has been the #1 personal effect of COVID, so we anticipate an eagerness to return to in-person gatherings. Family parties, group travel, and community gatherings are all likely to see a surge in the back half of the year, pending vaccinations. And as we know, where consumers grow, advertisers go, so again we’re crossing our fingers for a strong finish to 2021. 

7. Potential threats lurking. It’s not all sunshine and rainbows. While the majority of individuals await vaccination in the immediate months ahead, we may see unexpected changes in traffic and revenue. Additionally, there is concern about rising inflation, future economic downturns, and dealing with the fallout of the past year. So with that said, we must proceed cautiously and be prepared. Diversifying traffic and revenue sources and adapting and trying new things are more important than ever.

2021 will be a year of transition across the advertising ecosystem

2021 is going to be a huge year of transition in the digital advertising world as we move away from third-party cookies and cross-site tracking. At CafeMedia, we’re pursuing a number of paths as we work with many across the entire ecosystem to make the web more private for users while protecting publisher revenue and making sure ads still work well for advertisers. 

But many of the discussions continue to be very technical and arcane, and many of the headlines coming out of these in-progress solutions are misleading or just not true. 

For example, there was a recent announcement from Google that one of the alternatives to third-party cookies (called “FLoC”) is 95% as effective as current advertising. That is unfortunately false. 

Google’s analysis was done entirely as a theoretical exercise, not actually a real-world experiment. We’re optimistic that FLoC, TURTLEDOVE, or some of the many other proposals being worked on by Google and many others (including us!) will help make the new world of advertising just as strong as it is today, but it’s not there yet. We’ll share more on the status of many parts of Google’s Privacy Sandbox soon!

But in the meantime, you can catch up on some of our initiatives (and take immediate action with CafeMedia Email Identity) right here.

Content trends

Google mobile-first indexing [finally] coming in March

Google has been talking about moving to mobile-first indexing for several years now. It’s been the default for all new sites for over a year, but now Google will switch their process for every site to base search rankings on the site’s mobile version in March 2021. 

What does this mean for publishers?

With mobile-first indexing, the mobile version of a site should have the exact same primary content as the desktop version of the site, because it’s the only version that Googlebot will crawl now.

Publishers can easily test to make sure their sites are ready for mobile-first indexing using Google’s mobile-friendly page test.