2020 will officially go down in the books as one of the most volatile, uncertain and challenging years that marketers have ever experienced. And we will be all the more empathetic, more digital, and more agile because of it.
COVID-19 has forced marketers across the globe to rethink and reimagine their people, processes, and technologies faster than ever before. There has been unprecedented growth in the use of digital channels, with consumers flurrying online as countries quite literally shut down to contain the spread of the virus. And the companies that were further along on their digital transformation journey when the pandemic hit, were able to stay more resilient because of their digital maturity.
Amid these still unsettled times, it’s difficult to imagine the marketing trends that might be in store for 2021. But one thing is for sure: they point to a unique level of digital acceleration when compared to the marketing trendswe predicted for 2020. So, we reached out to the experts: Adobe’s John Copeland, VP of marketing and customer insights, as well as Jason Heller, president of Persado, who laid out the following digital marketing trends they see coming in 2021.
More meaningful digital experiences, personalization, and direct-to-consumer (DTC) models
According to Heller, the pandemic’s digital acceleration was a double-edged sword, as it replaced so many rich in-person interactions with generic digital experiences. And personalization at scale is the answer. “It’s time. No more excuses. Companies must execute on personalization at some type of scale,” he said. “This includes investments in CDPs, analytics and next best action decisioning, and content.” Copeland agrees, adding that 2021 is going to need a next-level degree of personalization specificity, with smart companies focusing on intent and need-based customer journeys.
Personalization at scale is an important marketing trend in 2021, as competition in the digital economy is heating up. Copeland also notes a move to direct-to-consumer (DTC) models as a result of the pandemic, with a flood of companies making a beeline for consumers online.
Pepsi, for example, recently launched two DTC websites, PantryShop.comand Snacks.com, where consumers can purchase directly from the brand. Additionally, in May 2020, Kraft Heinz debuted a DTC business line called, “Heinz To Home,” where consumers can purchase club-sized packages of brand staples like beans and spaghetti for home delivery.
Even smaller companies have jumped aboard the DTC trend. For example, prior to the pandemic, retailer Industry West was predominantly a B2B player, serving many companies in the hospitality industry. However, many of its commercial customers had to pause their business during the pandemic, and to stay in the game, Industry West swiftly shifted its business to prioritize a nascent DTC strategy. The company went from a 75/25 split—where 75 percent of its business was trade, and 25 percent was on the consumer side—to a 40/60 split, where the DTC business is now more than half of its revenue.
DTC isn’t by any means a new idea. The pandemic just accelerated it. Epsilon-Conversant research with the CMO Club shows that even before the coronavirus health crisis, 80 percent of CMOs believed brands that move to a direct-to-consumer model could impact their market, and 82 percent worried about how these newer, now consumer brands might fare in popularity with younger generations like Generation Z and Millennials.
“This year has pushed many companies to build direct relationships with consumers,” Copeland said. “We’re seeing this trend towards direct-to-consumer relationships in various industries such as manufacturing, consumer packaged goods, and even in financial services, where an insurance company that distributes through independent advisors, is now looking to build a direct line to customers and own some of that relationship.”
A move to first-party data, consent and identity resolution to build consumer trust and thrive in a cookieless world
According to Copeland, “the cookie is quite literally crumbling,” and marketers will no doubt be making shifts in 2021 to prepare. Research from Winterberry Group and IAB predicts an increase in spend and emphasis on first-party data (think: data a company has on its own servers) and identity resolution, with a push away from the third-party cookie (a tracker on websites created by a company other than the website owner).
The increased focus on first-party data strategies and identity resolution will help marketers effectively personalize experiences across the customer journey while respecting user privacy, Copeland says.
We can also expect a renaissance in contextual, intent-based targeting, as companies strive to be more relevant and personalized in a cookieless world, Adobe’s Copeland predicts. Intent-based targeting or personalization allows brands to get granular about how they connect with individuals based on not just the content customers are viewing, but how and why they got to that content and reacted to that content. By digging into these signals, brands can deliver more personalized messages and experiences in a relevant way. But, Copeland stressed, transparency and getting consumer consent for how you will be using this data is going to be of paramount importance to build customer trust and comply with evolving privacy regulations.
Doubling down on digital transformation, with an emphasis on people, and shorter paths to value for technology investments
Persado’s Heller described 2020 as the year of digital transformation under duress. “Digital transformation has been happening at many organizations for a number of years now. But even for brands that were ahead of the maturity curve, there were a number of big decisions that were kicked down the road. For many organizations the risk appetite to make these decisions and embark on the change management journey hasn’t always been easy. This year business leaders had no choice but to move on investments in digital infrastructure and customer experience.” Heller added that the investments approved under duress in 2020 are now under pressure to deliver value in 2021, and he sees a lot of positive changes in how companies are resourcing and managing these promises. Also expect to see more acceleration into digital channels in 2021, with many traditional brands moving to digital operating models, says Adobe’s Copeland.
“It’s a bifurcated trend,” Heller said, pointing to the disproportionate investment into digital during the pandemic, with some companies making their fair share of big investments in 2020, while other companies are playing catch-up in 2021 and making their investments this year. Copeland adds, digital transformation from a technology perspective will be a combination of implementation and minimizing time to value for investments made in 2020. “Marketers are being asked to create value more quickly,” he says.
Heller and Copeland both agree that the people quotient of digital transformation will take on heightened importance in 2021. Organizations are going to be looking for a very different breed of marketers. If there is one thing that the pandemic has taught us it is that agility drives business resilience, and marketing organizations will focus on hiring people that are agile and comfortable with being uncomfortable. This will also mean arming existing employees with the necessary skills, knowledge, and technology to effectively deliver on the expectations of modern marketing and customer experience.
Another dimension of the people quotient of digital transformation is “fine-tuning your business-casing ability,” Heller says. Today’s marketers must take on a different level of rigor when it comes to looking into the future to foresee the trends and using those informed inferences to make investments that are going to drive value for the business long-term. The need for clear, concise, and data-backed articulation of the forecasted impact of marketing investments has never been more important.
“Talent transformation in marketing will also be about ensuring that your people have a balance of data and creativity, and that the people who are delivering content and creativity on the frontline have a very data-driven lens,” Heller says. “They’re not just looking at reports because they have to. They are part of a data-driven process. And then likewise, taking the more historically data-driven kind of functions, like people who are in actual analytics roles and performance marketing roles, and bringing them closer to the creative process.”
Copeland added that talent transformation would also mean ensuring that people have a sense of urgency and accountability, and that everything they do, whether it can be measured directly or indirectly, must be accountable.
Building content marketing agility to feed a non-linear and always evolving digital customer journey
COVID-19 and the spotlight on racial injustice this year have taught businesses that culture, indeed our society, can change in an instant—and that companies need to be able to quickly pivot their strategies, their marketing, messaging and communications to stay relevant and resilient in times of change or crisis. In 2021 companies will invest in building up their content agility through technology and AI-powered automation.
“For most businesses, there are many different kinds of customers and many points of engagement in the digital customer journey. That means building content and experiences for many different permutations, with an operational framework that allows teams to test, learn, and optimize,” Copeland explains.
Heller agreed, adding that content is the one piece of the marketing puzzle that has the longest history, but has transformed the least. “Content has always been king,” he says. “It has always been the crux of marketing. The difference today is you have all this technology layered on top of it and orchestration, and you need the right data to get it in front of the right person.” 2021 will see an increased focus on content marketing and management transformation because personalization requires a lot more content and companies need to organize it and track it properly.
Heller referenced McKinsey’s 4Ds—Data, Decisioning, Design, and Distribution model (below). According to McKinsey, the key to unlocking the full value of customer relationships and delivering customer-centric and data-driven experiences at scale requires addressing the technology in each of these Ds, including a significant modernization of the content operating model.
In 2021, Heller expects marketers will lean further into testing modular content delivery and AI-generated content. We may also see complete overhauls in the process of planning, creating, managing, and deploying digital content, as companies strive for agility and a data-driven approach to content marketing. With these changes, companies will also realize that they need to invest more in the talent that understands these things, and they need to up-level the people who don’t understand them. “This is no longer optional,” Heller said.
A greater percentage of advertising budgets will be moving to digital in 2021, with more ads that focus on responsibility
Right as the pandemic hit in March 2020, we saw a lot of advertisers pull back on advertising in digital channels. And channel costs dropped. As the year went on and people adjusted, more companies came back to the digital ad game, which along with the election, drove media costs up again.
As a result, researcher eMarketer recently revised its digital ad spend forecast for 2021 upward, saying in the United States it will grow by almost 10 percent this year (vs. a prediction over the summer of just 6.2 percent growth). The shift to an almost all digital economy will be the driver into a higher digital media spend, due to its proximity to e-commerce.
Video advertising will also be a priority in 2021, Copeland predicts, pointing to research from Adobe Digital Insights, which uncovered interesting behavioral patterns when it comes to video consumption in the U.S. The analysis, coupled with a complementary survey of more than 1,000 people in the U.S., points to home-bound consumers binging video content online, with viewers completing videos more often, and channels like OTT (think: Netflix) growing in consumption.
With the increase in ad dollars to digital, being more experiential, relevant and personalized is going to be key. “You can’t just treat it as a transaction medium,” Copeland warns. “It should be viewed as an opportunity to continue to build a relationship.”
And with so many consumers now choosing to engage with and buy from brands that share their own values (71 percent), we will also see a shift in ad strategy, where companies do more brand-level awareness around their corporate social responsibility, including diversity and inclusion efforts, sustainability, accessibility and more.
Apple’s latest ad for the iPhone, which touts the device’s commitment to privacy, is a strong example.
No time to rest in 2021: Digital marketing trends aplenty
Marketers sure have their hands full in 2021 as we (hopefully) begin to come out of the pandemic. There’s no doubt that the marketing and customer experience landscape will continue to evolve and there is still uncertainty around just how much change to expect. Organizations that focus on creating more meaningful digital experiences by moving to first-party data, consent and identity resolution, and those that double down on digital transformation with an emphasis on people and shorter paths to value for technology investments, while also building a foundation for agile content marketing and management and rethinking ad strategies, will come out on top. Strap in. Hope you’re ready for a fun ride.