Criteo’s Kenneth Pao outlines six trends that marketers will need to pay attention to, in order to optimise the potential for a successful 2021.
No one could have predicted the global pandemic that has completely changed life as we know it, and the unlikely comeback of QR codes — the constant change we’ve witnessed this year has forced brands around the world, even in the Asia Pacific (APAC) region, to step back from their well-planned marketing strategies and adapt to the immediate priorities of the moment.
Despite there being many unknowns, several trends impact the current state of consumer behaviour. In particular, I hope to discuss six of these trends, how this is likely to affect the advertising industry, and ultimately, how brands can better shape strategies next year in light of this.
1. Exponential e-commerce growth will continue
While e-commerce was already crucial for brands, this year’s quarantine lifestyle led to an influx of online shoppers. According to Singles’ Day 2020 data from Criteo, we saw record spikes in online sales and traffic across Southeast Asia. Malaysia and Thailand saw the highest increase in indexed sales this year, of 600% and 305% respectively, while Singapore saw a 248% increase.
This shift is driven from both existing online shoppers buying more, as well as new online shoppers who have been pushed out of their “in-store comfort zone” due to necessity. According to our recent “Peak to Recovery” survey of more than 13,500 consumers worldwide, 53% of respondents discovered at least one form of online shopping and want to continue during the peak of COVID-19.
These new digital shoppers represent the massive opportunity for brands to expand their existing audiences on digital channels. Leveraging marketing tools, for example, retail media advertising and social retargeting ads to engage the most relevant consumers and convert sales will be a key area of focus.
2. Advertisers and brands will increase investments in digital advertising
According to Criteo’s COVID-19 Impact on Marketing APAC survey, 38% of marketers saw increased website sales and bookings since the onset of the pandemic, resulting in accelerated digitization of their business processes.
As such, we have seen how the impact of COVID-19 has necessitated changes to marketing strategies. In fact, 7 in 10 marketers in APAC say that the share of digital marketing spend at their company has increased due to COVID-19.
The survey also reported that marketing spend will continue to be driven across digital channels, with marketers planning to spend more on social media (58%), search marketing (56%) and content marketing (54%) in the next 6 to 12 months. Apart from increasing spend across digital marketing channels, like paid display and content marketing, brands will also need to ramp up on their efforts to engage consumers on the app front.
Here is why: according to our recent Global Apps Survey, we are seeing a pivot toward app sales, with the share of app sales at 75% for retailers with a shopping app. Southeast Asia was one of the regions with the highest app share globally. 55% of shoppers in APAC downloaded at least one shopping app (retail, food, or grocery/alcohol) during the peak of the COVID-19 outbreak.
COVID-19 has fundamentally changed the relationship between mobile users and their apps, elevating their importance in daily life. This is likely to continue even in recovery stages as consumers have experienced and enjoyed the benefits of using apps.
For Tmon, Korea’s first social commerce company, boosting app installs and strengthening its presence to drive conversions were key priorities. Recognizing the importance of reaching new audiences and delivering quality experiences to both sellers and consumers, it leveraged app retargeting and install campaigns targeting the full-funnel of consumers, which achieved more than 30,000 monthly app installs and a 27% retention rate.
As such, in-app advertising will need to be considered within brands’ plans in the new year, to find new ways to meet consumers on these platforms as they continue to spend more time there.
3. Connected TV will become a marketing mainstay
Like the rise of e-commerce, the popularity of connected TV (CTV) and over-the-top (OTT) devices has been trending upward in recent years, with the pandemic accelerating this growth. It is thus essential that brands engage consumers on these devices through advertising.
According to eMarketer, all APAC countries have seen exponential growth in digital video viewers this year, and that momentum will continue through the end of 2024. Additionally, findings by Nielsen revealed that the number of total hours spent with CTV devices began to rise once people started quarantining at home (by March 30, 2020), showing an 81% increase year over year, which amounts to nearly four billion hours of CTV use per week.
The bottom line for brands is that consumers are migrating to CTV and OTT — and it is key that advertising meets them there. More people using CTV and OTT devices means more hours of content watched on those platforms and a captive audience that would be open and receptive to relevant ads.
4. Brand safety will stay front and centre
In 2020, we saw many advertisers take a stand against platforms that failed to manage the spread of misinformation and hate speech and become more intentional with where they invest their advertising dollars.
The ongoing COVID-19 pandemic also brings brand safety to the forefront. Since the renaming of the virus to "COVID-19", the blocking of words "COVID" and "COVID-19" has been on the rise in APAC (10 times increase in “coronavirus” blocking during the first few months of 2020). Despite these keywords being blocked, brands remain cognizant of the possibility of some digital ads still falling through the cracks and end up being misplaced.
We expect that more brands will leverage more solutions in 2021 that can help them better control ad placements to safeguard their brand's image and stay true to their brand values.
5. In-store shopping experiences will become even more seamless
While e-commerce trends took centre stage in 2020, in-store shopping remains a priority for consumers and thus will continue to be a focus for brands.
A recent study conducted by Advanis showed that despite an increase in online shopping frequency by consumers, seven in ten still reported a preference for purchasing grocery items in person, whilst around half (47%) opted for home delivery, and 17% relied on curbside pick-up.
We also expect to see in Asia’s regional landscape, consumers alternating between online and offline mediums throughout their shopping journey. This translates into the pertinent need for brands to bolster their omnichannel presence and ensure that experiences across online and offline are seamless.
What will change about the in-store shopping experience, beyond increased sanitation, is that it will be optimized for consumers to spend less time inside with features such as digital transactions, “buy online, pick up in-store”, and cashier-less checkouts. According to McKinsey, shoppers will embrace new features such as click-and-collect as an option that provides both safety and convenience.
6. Industry collaboration towards new identity solutions will kick into overdrive.
One of the key initiatives for the industry is the development and adoption of a future-proofed solution for online identity that does not rely on third-party cookies.
What is unique about this endeavour is that it affects the entire industry, from advertisers, publishers, ad tech partners, and consumers. As such, everyone is invested. In 2021, we expect to see more advertising players come together. Recently, Criteo collaborated with The Trade Desk, to stand behind unified solutions, which advertisers and publishers can begin testing in the coming year, and we look forward to pursuing more meaningful collaborations across the ecosystem to push this forward.
As we look toward a new beginning in 2021, the key to leveraging these trends would be to keep strategies nimble and staying open to adapting to the unexpected.
Brands in our region have been able to demonstrate great resilience through a tumultuous 2020, I am confident that they will be able to stay strong and carve out new paths to success, no matter what the year brings.