In the ad industry, forecasting consumer behavior trends is a constant exercise. How effectively a business reads the tea leaves can greatly impact its growth.
That said, predicting what will happen is not always so intuitive. Last year, while much of the industry predicted a resurgence of ad spend and a connected TV (CTV) market boom, among other things—a few commonly-repeated predictions simply didn’t pan out. Here are three big predictions for 2021 that never came to be, and the learnings we can draw from them.
1. Ad tech fervor would die down.
After a rollercoaster 2020, many predicted ad tech would slow down or stagnate in 2021. The industry was also under growing pressure on data privacy. But the assumption that overall ad tech spending would be down proved premature. 2021 was another boom year for the industry. We saw a string of high-profile IPOs from the likes of DoubleVerify, IAS, Taboola, AppLovin, and more. And mergers and acquisitions continue to thrive—take Yahoo’s own acquisition by Apollo to help fuel its tech and media rocket ship.
The industry experienced growth even as it faced a moving deadline for third-party cookie deprecation, and an evolving future of identity. While we’ll have to wait to see what 2022 brings, we can expect a strong market for the industry.
Key learnings: As consumer habits continue to shift, and as marketers and publishers need better, data-driven tools to support their growth, ad tech will continue to be a highly valuable and high-growth industry.
2. A common identity solution would emerge.
This time last year, many people predicted 2021 would be the year stakeholders agreed upon a new identity (ID) solution. But as 2021 progressed, it became clear that we needed to adjust how we think about a cookieless future. At the time, many pondered how and where one universal ID might emerge, while others thought about a world where Google’s Federated Learning of Cohorts (FLoC) would beat every industry consortium to market. In the end, we know that not only were those predictions too hasty, but that they weren’t what the market actually wanted.
Key learnings: The market wants multiple, interoperable ID solutions, and more industry stakeholders are now testing new strategies like contextual identity for addressability and scale.
3. The industry would be ready for the cookiepocalypse.
While Google announced in January 2020 that it planned to stop supporting third-party cookies in Chrome in 2022, last year it gave us all an extension on that deadline. But that extension also led some digital professionals to take their eye off the ball. It created, for some, the impression that marketers and publishers didn’t need to buckle down immediately to prepare for a cookieless world. On the other hand, the players that tested and learned gained important benefits and, in some cases, increased effective cost per thousand impressions (eCPM) rates on Safari and Firefox by 80%.
Key learnings: There’s really no time to lose for either the buy or the sell side. The future of identity will continue to evolve through 2022, and planning ahead will mitigate the effects of any unpredictable twists and turns we see this year.
Q1 is a time to look to the future, but also to gain hindsight—to reflect and learn from the past year as we plan for the next. 2021 brought a lot of surprises and many more lessons for the ad tech industry. Business goals, much like an algorithm, are more useful when they’re optimized over time.
—Iván Markman, Chief Business Officer, Yahoo!