Even before the pandemic, ecommerce channel advertising was attracting a lot of attention from advertisers—especially in verticals like consumer packaged goods (CPG)—as well as retailers, which hoped to add new higher-margin revenue streams to their businesses after seeing Amazon’s success in the area. Amazon had become the No. 3 digital ad seller in the US thanks primarily to placements on its ecommerce property, and companies including Walmart, Target, and eBay had been growing similar businesses.
Retailers, meanwhile, are embracing the transition to ecommerce. For example, Next announced plans to spend above pre-pandemic levels on marketing this year, per an April article from Marketing Week. The UK retailer also said it would prioritize digital marketing channels while pulling back on print and TV advertising.
Ad spending growth was relatively even across the board in 2019, but we saw massive declines in 2020 for some segments like travel (-51.0%) and huge growth for others like computing products and consumer electronics (38.8%). And a few notable big swings are expected this year, too:. Travel ad spending will rise 33.0% this year—a massive 84-percentage-point swing.
Retail has accounted for more than 20% of the market ever since we began tracking digital ad spending by industry, and the pandemic-driven ecommerce explosion of 2020 has only launched retail to new digital heights.
Consumers have been stuck at home for abnormally long stretches and have embraced ecommerce as never before. Almost overnight, it became necessary for CPG manufacturers to reach their customers online.
They care about trying all these different playbooks that allow them to optimize their TV spend and their advertising spend. Some of the fastest growth in terms of new ad dollars coming to TV was from D2Cs. So the agencies and the sell side had to adapt because they didn't necessarily have the tools and the transparency that a D2C player demanded.