Predictions Series 2021 with Verizon Media’s Chief Business Officer, Iván Markman
Hi Ivan, please tell us how you hoped the New Year 2021 will start for the industry.
The industry overall, I expect the next not-normal!
For 2021…let’s start with consumers: coming out of 2020 there will be a confluence of factors that will likely create very unique consumer patterns. For starters, there will be continued uncertainty around the pandemic and its cure (vaccine timing and effectiveness, collective immunity, etc.) as well as the economic impact on households (employment, stimulus, impact to savings and credit). Coupled with the previous, consumption patterns will be impacted by an incredibly unusual 2020 (no travel, live entertainment, more e-commerce, etc.) carrying over pent-up demand and possibly overstocking (think toilet paper and hand sanitizer, or on the digital side, SVOD subscriptions).
When it comes to the industry, the above consumer trends will intersect other related trends of note: publishers innovating experiences and feeling the pressure of more challenged ad markets and the looming impact of regulatory and industry changes in privacy. Advertisers feeling the pressure on P&Ls and needing to navigate the ever changed and changing consumer landscape while also addressing privacy changes. All of this will require continued flexibility and innovation in consumer and marketing strategies. Despite all of the above, the capital markets are bullish on adtech with significant boosts and IPOs and M&A coming back into the market.
What would you forecast for adtech in 2021?
Ad Tech is Hot Again! Wall Street is back in love with ad tech, as public companies exceed expectations. We’re seeing reports of big filings coming from private companies like PubMatic and DoubleVerify. M&A has also returned to the category after it fell off a cliff in the first half.
What is going on?
A lot, actually. More cord-cutting coupled with more CTV consumption means that budget flow from TV to advanced forms of TV is only going to accelerate. Continued digitalization of Out of Home assets in multiple forms (billboards, WiFi kiosks, car ads, etc.) creates even more opportunities for digital, omnichannel buying especially as more and more of the economy reopen throughout 2021. And the massive rise in e-commerce in all its forms has heightened the urgency for more ease, efficiency and effectiveness in this omnichannel universe.
Ultimately, we’re seeing a seismic shift in the category, with it busier than it has been in years and this will continue in 2021.
For advertisers and publishers this will mean new and improved options to engage with their consumers and grow their businesses.
Where do you see data management and adtech privacy challenges heading in 2021 in the post-CCPA era?
Privacy & Data: free is great but someone has to pay for it, isn’t it?
“From shifting consumer privacy preferences to global legislation to changes in the way browsers operate, it’s becoming more challenging every day for brands to effectively engage with their audiences in meaningful and respectful ways. That’s bad for the “free internet.” The sustainability of the “Free Web” that consumers have become accustomed to will be impacted severely if publishers aren’t able to maintain monetization and make their keep. At the end of the day, ads are essential to the life and survival of the internet.
Marketers and publishers need a solution to bridge the identity gap and deliver growth — while honoring privacy preferences and maintaining a good consumer experience. This is possible. While the IAB and others are working hard to develop solutions in support of identity resolution, the industry’s largest players will also need to take the lead on providing better paths forward.
So, everybody is geared up for the first party data policies?
Core to identity post-cookies will be first-party data. Players that have built an identity graph using a diversity of owned, consent-based, cross-channel, first-party data will be in the position to enable marketers to lean into new and alternative identity, targeting and measurement solutions. We’re also likely to see more partnerships develop across the industry to take on walled gardens and ensure identity matching in cookie-less environments while safeguarding user privacy.
This is the equivalent to operation warp speed for the ad industry, with the promise of a gold rush in first-party data collection from both advertisers and publishers. Look for a host of identity solutions to be tested (and validated) in the market this year.”
So, what will replace the cookie in 2021?
What will replace the cookie in 2021? Email. Yes, email, its enduring value marches on. Email is the de-facto successor to the cookie as the battle rages on between open source identity and proprietary identity, i.e., the walled gardens.
Open source would commoditize identity away from the walled gardens, which sounds great in theory. But there are concerns around the quality of this data, who ‘polices’ usage and the potential regulation by legislators.
But we’re looking at a world where open source and proprietary data could live side by side with identity differentiated by direct consumer consent and association to many deterministic signals that can be shared in a secure, privacy-centric way. We’re building something similar with our own identity graph, Verizon Media ConnectID.
How would the Omnichannel Media mature in the OOH and CTV era?
It’s Not Just Connected TV — it’s integrated TV and DOOH, and… the omnichannel media journey shall continue in 2021…
By now it’s old news consumers are flocking to streaming. With it, a plethora of SVOD services have emerged from Disney, Paramount, Comcast, Warner Media, Discovery and it seems many more to come. At the same time, individual household economic stress, as well as SVOD saturation, will be catalysts for more AVOD.
With new services launching, audiences won’t want to keep paying out for individual subscriptions. So AVOD, which is already growing very fast and predicted to grow by 17% globally in the next four years, is set to benefit from this subscription-fatigue. Take Pluto TV, for example, In March, as COVID-19 took hold, the number of active monthly users spiked 55% from 2019. Similarly, in September, Tubi reported that its MAUs hit 33 million – up 65% year-over-year With this explosion in consumer engagement opportunities, managing CTV campaigns effectively becomes more of a challenge. Not to mention the additional opportunities that household addressable advertising brings — and this is only talking about the evolution of CTV.
Could you please tell us more about your thoughts on DOOH?
DOOH is also set to explode next year via a combination of pent-up demand as millions are expected to be vaccinated by the spring and summer, and the growing availability of DOOH inventory through programmatic channels making it easier for advertisers to buy. It creates lots of new meaningful opportunities to engage consumers, yet at the same time, adds complexity to an omnichannel transaction.
That complexity continues, with deeper integration of native formats, dynamic ads, AR, audio, and more. Lots of very exciting and valuable opportunities, yet a lot more to navigate. For buyers to take full advantage, they’ll need to be able to access inventory programmatically, alongside other media types, including desktop, mobile, DOOH, audio, XR, and beyond.
Technology platforms will also have to make it easier to plan, buy and manage TV inventory types alongside one another.
While adtech makes omnichannel purchasing possible, the majority of planning and buying is done channel by channel and the full potential of platforms are still being realized. It’s time for agencies to embrace more efficiency and collaboration. 2021 could be the year when siloed buying and planning teams are unified and operate in an omnichannel way.
What about the fierce competition in the Live Streaming business?
Now Streaming is everything.
The streaming wars reached an epic crescendo with the emergence of a host of SVOD services emerging and the Warner Bros. surprise announcement that all of its 2021 film slate will be moving day and date with HBO MAX.
Fierce competition and the explosion in consumer engagement opportunities have made CTV the epicenter of ad sales. Next year, we’ll see major brands radically alter their ad spend from the TV Upfront in favor of more flexibility and greater investment in streaming and CTV. One side effect: managing CTV campaigns has effectively become more of a challenge, and buyers will need more clarity. With the rise of content costs. I wouldn’t be surprised to see premium services test a hybrid model with ads and subscriptions, too. Wonder Woman isn’t cheap.
The top development in 2021 that you are keenly hoping to arrive –
Innovation: 2021 will be the year of immersive experiences.
From concerts to classrooms, COVID-19 has upended traditional in-person experiences. To adapt, they’re shifting online, with AR and VR being used to bridge the physical and digital divide. 2021 will be the year of immersive experiences. As 5G deployment grows across networks, offering much faster data speeds and low-latency, and computing is increasingly done at the edge of the cloud instead of inside a device, it will in turn lead to new form factors for devices as they don’t need such huge computing power as they require right now to deliver XR experiences. We have already seen great strides forward in 2020 with live events across music, sports and beyond with new immersive XR experiences for audiences both at home and within venues.
So, what about their impact on sports broadcasting and event coverage?
Limitations on sports event attendance have led to new and immersive forms of content to satisfy stuck-at-home fans. If 2020 introduced audiences to this new world, consumers are now fully embracing it. The NBA played a “bubble” season in Orlando, they launched a VR experience through Oculus to digitally transport people to games. Even when fans return to stands in the physical world, don’t rule out continued room for fans to line up in the virtual world. This tech has the power to increase capacity at stadiums tenfold.
Meanwhile, in retail, AR is being used to make shopping experiences smoother, allowing you to virtually sample products or see items in-use before buying online or heading to a store. AR and VR are also likely to be used more than ever in the B2B space, with all major professional events in 2021, including CES and DMEXCO, set to be virtual. Bizzabo, the event platform, finds that over 90% of event marketers expect to make this shift.
As processing for content experiences moves to the edge of the cloud, we will see significantly more personalization opportunities for content owners as video, websites, and XR experiences are rendered in near real-time. It will allow for stadiums to be brought into the home in VR / AR for audiences to watch their teams play, with interactive replays, stats and gaming, as the action happens.
These types of digital touchpoints will ultimately become the norm in 2021, enhancing and, in some cases, replacing many in-person experiences outright. Consumers are consuming immersive experiences at a ravenous pace. For brands, publishers and marketers, must embrace this shift to digital with full force.
What impact does Cloud make in the modern era, in the post-COVID world?
Clouds Are lifting.
Smartphone usage is expected to account for 50% of global internet traffic in 2022, with nearly 80% of that mobile traffic for video. The deployment of 5G is central to that growth, as greater bandwidth and speeds will also trigger greater demand for high-quality video content, services and experiences. To fulfill that demand, CDN (content delivery network) architecture is critical.
Traditionally, video content has been stored in a central data center that powers video service requests (cloud-based services). This creates massive data loads at the center, as well as increased latency due to the distance between the data center and end users. All negatively impacting the video experience through slow-loading videos, apps or web pages.
A CDN shares and loads video content from a data center closer to the users’ network edge. This reduces transmission delay and loads from a sole data center. With CDN technology capable of delivering high performance video experiences and distribution with low latency, demand for it will skyrocket in 2021 as 5G scales further.
Thank you Ivan for answering all our questions!
Ivan is the Chief Business Officer at Verizon Media.
Verizon Media, a division of Verizon Communications, Inc., houses a trusted media ecosystem of premium brands like Yahoo, TechCrunch and Engadget to help people stay informed and entertained, communicate and transact, while creating new ways for advertisers and media partners to connect.
From XR experiences to advertising and content technology, Verizon Media is an incubator of innovation and is revolutionizing the next generation of content creation in a 5G world.