By Fred Marthoz
As 2020 draws to a close, we can all agree that this year was certainly like no other. We saw considerable changes in our world and in our industry. From COVID-19 to Google’s announcement to sunset third-party cookies to new privacy regulations, and tech and digital advancements, 2020 was a year of constant evolution and transition — most importantly, this year taught us the need to embrace and prepare for uncertainty.
The pandemic has ushered in a digital renaissance with virtual platforms emerging as the go-to channel for business transactions and commerce. Overall, this year’s seismic shifts in consumer behavior advanced the internet sector, particularly Southeast Asia adding 40 million new internet users in 2020, per a report from Google, Temasek Holdings and Bain & Company.
But what’s coming next year? With the repercussions of the global pandemic expected to continue for some time, here are a few trends that are likely to shape the trajectory for the advertising and marketing ecosystem in 2021.
Digital transformation accelerates in all aspects of life
The global pandemic made digital a necessity across all aspects of work and home life. This trend will show no signs of slowing across industries. For example, as remote work becomes the default, cybersecurity will take on even greater significance for companies of all sizes. Banks will need to flex their digital muscles as well, as fintech startups begin chipping away at their market share, similar to what DTC did to traditional retail. And, there’s no stopping gaming or streaming’s meteoric rise as more consumers seek variety for home entertainment. I’d expect gaming in particular to break through into new age and gender brackets as we all seek a safe form of adventure and fun.
This influx of customer data — behaviors, intent, interest — will be a real boon to brands as they work to get closer to customers. Data enrichment from quality providers will help them understand and find more of those best customers at scale and develop new products and services to drive engagement and loyalty.
Say goodbye to cash
The share of digital payments in 2021 will increase, as paper money transactions continue to decrease. With digital financial services in Southeast Asia expected to generate over$38 billion in revenue by 2025, we will see more supportive regulations to meet the growing demand and pave the way for consumers who are largely underserved by financial services and have no basic access, such as a bank account. The need for better financial services will give fintechs a large addressable market for their solutions, fueling adoption and growth of the sector. In fact, per the e-Conomy SEA 2020 report, the pandemic has also accelerated adoption of online financial services as more consumers rely on contactless ways to pay and transfer money, shunning cash.
Going forward, credit cards and other e-wallets will become the natural default payment for both online and the rare in-person transactions, with fewer vendors able to or willing to accept cash. Payments will be made either in a local currency or, as an alternative, in a decentralised currency, sometimes issued by a dominant industry player (similar to Facebook’s Libra).
Rubbernecking the Cookie Collapse
As we saw in 2020, digital advertising can’t look away from the demise of the third-party cookie. I anticipate the slow and drawn out sunset of the cookie to continue to dominate headlines in 2021. Misinformation will persist about the third-party cookie death being synonymous with the health of third-party data. As Google’s moveable cookie deadline draws near, we’ll see advertisers amping up the pressure for proof that cookieless solutions deliver measurable and transparent ROI.
Identity — Answer to Marketers’ Pain
Digital advertising once relied on context alone to satisfy marketer goals, but in today’s environment,context alone can’t meet their needs.For marketers to engage with real people (not a device or a one-time page visit), and accurately target and message customers, they must invest in identity resolution. From getting a real-time 360 customer view and solving frequency capping restrictions to precise measurement for conversion rates and privacy and consent, identity solutions can solve many of the challenges faced by marketers, publishers and consumers.
As more and more of the economy reopens throughout 2021 globally, this year’s experiences have taught us that agility, flexibility, and creative problem-solving are our most valuable resources. The pandemic will continue to force the industry to adapt to a digital-only world and it is incumbent on us all to continue to quickly evolve, forge the right industry partnerships and solutions to continue innovating and engage with consumers in meaningful ways.
The author is the managing director of Lotame, Asia. Views expressed are personal.