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Earlier in the month, we took a specific look at the issue of third-party tracking cookies and how their ongoing demise is likely to impact measurement, ad targeting and attribution in 2021. But what other data trends are likely to come to the fore next year? How will the ongoing Covid-19 crisis and the way that brands respond to it impact the usage of data? And what about automation, artificial intelligence and the emergence of new tools?

We speak to a number of experts in data, analytics and advertising to find out what they see on the horizon for 2021.

  1. Data strategy: responding to the impact of Covid-19
  2. The role of data in the business in 2021
  3. Trends in measurement & analytics
  4. The impact of changing attitudes to data privacy on measurement & tracking
  5. The rise of AI & automation

And if you want to hear more on 2021 trends, join us on January 26th at 3pm GMT as Econsultancy founder Ashley Friedlein will reveal his digital and marketing trends for the year. Register here.

1. Data strategy: responding to the impact of Covid-19

“Arguably the biggest trend in 2020 was the fast acceleration of digital,” says Justine O’Neill, Director at Analytic Partners. “As the high street was forced to shut down, consumers shifted online and brands were forced to focus on e-commerce, improving their omnichannel journey and new offerings such as click & collect.”

O’Neill notes that this shift in consumer behaviour led to an answering shift in media spend, with brands targeting consumers via digital channels and looking to performance marketing for rapid results. However, she cautions, “brands need to remember media synergies and not only trust in one channel. They need to constantly re-evaluate their marketing setup and not lose sight of brand and its halo importance. For instance, the more brands rely on promotions, the more will they have to rely on incrementality for their sales, not brand love.

“Our ROI genome shows that there’s a strong value in investing in brand, which tends to outperform product, promotion and functionality messaging 80% of the time,” O’Neill goes on. “However, it’s important to strike the right balance between branding and product messaging to make sure that we’re able to achieve both our business growth as well as our performance goals. It’s risky to favor short term growth over long term gains and brands need to be carefully watching this and the associated ROIs as the huge changes in 2020 might lead to skewed KPIs for 2021.”

Andrew Hood, Founder and CEO at Lynchpin and co-author of Econsultancy’s recent AI, Machine Learning and Predictive Analytics Best Practice Guide, observes, “2020 exposed for many the lack of critical foundations in place for many data strategies. Some businesses that needed to get on top of leading indicators as markets were disrupted quickly found that accurate and consistent data was either not in place or easily accessible at the right levels of decision making.”

Fortunately, Hood believes that businesses will take action to remedy this in 2021. “For many, [this] has pushed data strategy back to the top of the agenda for 2021, and with the changes in compliance and tools it’s an ideal time to be revisiting what the key use cases are for now and the future and focusing efforts in on those.”

Kristina Prokop, CEO and Co-founder at Eyeota, agrees that the coronavirus pandemic has “accelerated the focus on data” for many businesses. “Due to the maturity of the market, the depth of data applications and strategies have expanded despite the challenges of the coronavirus,” she says. “Since customers are coming online at unprecedented rates, the ability for brands to effectively acquire new customers is more important than ever.

“Using data to better understand existing customers and what attributes they have based on both first-party and non-first-party data enables brands to develop more effective targeting strategies. The acceleration of using data for more use cases such as first-party data enrichment, modelling and site personalization will continue to grow.”

The use of data to understand the customer mindset will also help brands to navigate the uncertain climate of early 2021, adds Mark Inskip, CEO, UK & Ireland at Kantar Media. “In 2021, we can expect to see brands challenging their data to deliver smarter, more joined-up insight. As uncertainty persists into the first months of the new year, brands who use that streamlined and enriched data to understand the consumer mindset, communicate accordingly and measure the impact of every aspect of their strategy will chart a path for growth.”

Nestlé’s Global Data and Analytics Manager on the fundamentals of data strategy

2. The role of data in the business in 2021

How will these changes in data strategy, and the lasting impact of the Covid-19 pandemic, affect brands’ overall attitudes towards data and the role that data plays within their businesses? Inskip believes that data became a port in the storm for many businesses during the turbulence of the pandemic.

“As we all know, 2020 turned the world upside down,” he says. “In advertising, brands longed for some much-needed clarity through the chaos. As teams looked to strategise, data’s role in guiding businesses through uncertainty could not have been more apparent and a hunger for actionable insight extracted from that data flourished.

“The importance of data isn’t new to businesses, but Covid-19 has fast-tracked how brands think about it. Just having data isn’t enough – as media teams navigate the huge amount of data available now, and the growing regulatory frameworks around it, a trend towards making existing data work harder to inform investment decisions is accelerating.”

“The biggest challenges in 2021 for marketing decision makers will be further uncertainty, moving consumers and budgets, brand building and ecommerce,” adds Analytic Partners’ Justine O’Neill. “If coronavirus has taught us anything, it’s to experiment more. As budgets continue to be tightened, the rule book has been thrown out and sacred cows can be challenged. Brands must shift away from a share of voice approach to a more optimised strategy, drawing on real time data to shift their campaigns and strategies in line with the ever-changing guidelines.”

Christian Selchau-Hansen, CEO and Co-founder at Formation.ai, believes that data is becoming the most valuable asset that companies have – but they aren’t necessarily treating it that way. “With digital engagement and adoption having massively acerbated in COVID, companies have new and incredibly valuable insight into their customers. Data is quickly becoming companies’ most valuable asset. Yet most companies don’t measure returns on this asset in the same way they do others. This should change immediately.”

He also believes that it is vital for marketers in 2021 to become “data science capable”. “Being a marketer today is hard, but to be successful you need to be able to access and use data to improve your understanding of your customer and achieve measurable business outcomes.”

3. Trends in measurement & analytics

What about the way that businesses approach insights, data measurement and analytics? Michele Morelli, Executive Vice President of Global Marketing at Toluna, believes that because of the fundamental and unprecedented impact of Covid-19 on consumer behaviour, marketers will rely on real-time measurement rather than previous trend data, which relates to an era before the pandemic and thus cannot be usefully relied on.

“There will be a greater emphasis not only on measuring consumer opinion, sentiment and behaviour in real-time by using technology platforms or SAAS, but changing the marketing mix to one that is technology-based and enables agility, with an emphasis on digital media or that which operates like digital media (such as streaming ad insertion),” she says. “This will lead to an increase in automation and leveraging technology for customer centricity. These have always been core to marketing, but the pandemic accelerated the need to implement technology to create flexibility in marketing plans. The one key thing I cannot stress enough is the need to focus on the rapidly changing behaviours and sentiments of today’s consumer.”

The upshot of all of this, predicts Morelli, is that insights professionals will have “a greater seat at the table”. “Not only will the amount of insights produced be greater (because of increase in message testing and brand perception) but with instant access to insights, the insights person is literally the voice of the customer. Since brands cannot rely on past trend data to predict the future, the insights person is more important than ever before. And marketers realise it.”

Lynchpin’s Andrew Hood believes that the recent release of Google Analytics 4, the latest version of Google Analytics, will inevitably have a widespread and lasting impact on the way that marketers approach metrics – particularly due to the fact that Google has opted to retire bounce rate as a metric in GA4.

“Whether or not you are a Google Analytics user and/or fan, the release of GA4 in the autumn of 2020 represents some big shifts in industry thinking that are likely to have far broader impact in 2021,” he says.

“Firstly, the paradigms of page views and bounces – that perhaps never worked that well for websites and certainly didn’t work for mobile apps – are being consigned to history in favour of a more straightforward event-based model. Secondly, that model starts to point to a world where we potentially count interactions without identifying users – a pretext perhaps to enabling truly anonymous cookie-less measurement in some scenarios.

“Finally, the provision for the first time in the free GA tool of raw user-level data streaming to BigQuery suddenly opens a whole new world of attribution modelling and personalisation capability to a much broader audience.”

The Fundamentals of Marketing Measurement and Analytics

4. The impact of changing attitudes to data privacy on measurement & tracking

In the introduction to this article, I alluded to the demise of third-party tracking cookies, also known as the ‘cookiepocalypse’, as a trend that will significantly impact data and advertising in 2021.

However, the phasing out of third-party tracking cookies – which is the result of a mixture of browser-side cookie blocking, new legislation on data privacy, and evolving consumer attitudes – is just one part of a broader shift in attitudes around data privacy that has spanned the past few years. Consumer calls for greater transparency, and legislation that enshrines new consumer rights, are still developing and technology giants like Apple and Google are updating their platforms in ways that chime with this approach to data.

What will all of these things mean for marketers?

David Grabert, VP Brand & Communications at Disqo, believes that, “Clarity of purpose and authenticity are more important than ever, and transparency around data collection – with consent and trust – is part of this. 2021 will see marketers increase focus here, as evolving legal requirements, technology environments and rising consumer expectations require it. A welcome trend should be advertisers putting ethics at the core of their data strategies as they ready for a future without cookies.”

Eyeota’s Kristina Prokop agrees: “The obvious 2021 focus for the digital advertising and marketing ecosystem will be how we all evolve to operate in a world without third-party cookies,” she says. “With the pending deprecation of third-party cookies, there has been a stirring of insecurity amongst agencies and platforms around what might happen. For data companies, 2021 will be focused on executing the strategies to handle and transact on multiple IDs.

“The onboarding and ID space has gotten very crowded in 2020. I expect that we will see consolidation in the market next year. However, it will not be a winner takes all scenario. I do not expect to see big budget increases to test new IDs in the first half of 2021. After a phase of testing, we will start to see larger test budgets running in the second half of the year.”

Wes Parker, Managing Director at DemandMore, believes that continued moves by the ad giant duopoly of Google and Facebook to protect user data will be a hallmark of 2021. “We have already seen significant inroads in 2020 with Google announcing that they will phase out third party cookies in Chrome within the next two years,” he says. “This has paved the way for GA4, Google’s new analytics solution that will replace universal analytics that focuses on events and moves away from user sessions, making users less identifiable.

“Google has also started to limit the amount of search query data available for low search volume terms to ensure that search terms can’t be traced back to a user. In 2021, Google and Facebook will go further to protect users’ data and first party data will become more valuable to advertisers.”

Andrew Hood believes that 2021 potentially represents a “perfect storm” for digital measurement: “dramatically changing consumer behaviour as we exit the worst of the pandemic, coupled with new cookie curtailment regimes from regulators and browser manufacturers that threaten the visibility of those changes.

“Cookie consent will represent a big opportunity and threat for brands going into the new year,” he predicts. “Those that get it wrong may end up losing large chunks of visibility while ironically failing to comply with the law; those that get it right will therefore end up at a clear competitive advantage.”

Gabriella Stano Aversa, Director of Strategy and Planning at AdColony, points to the ongoing global developments with privacy legislation as well as moves by Apple to enforce greater data transparency as trends that will force advertisers to adapt their approach to targeting in 2021. “2020 saw the CCPA getting a little more rigid, Brazil’s LDPA rearing its head and Apple making its position on device identifiers known. 2021 will see more legislation like CCPA across the world, but don’t expect a US federal level law – state-level patchworks are more likely.

“Apple will also be finally enforcing its data sharing requirements, which will force every advertiser to look at more contextual signals and seek channel expertise, rather than target the same defined device ID-based audiences again and again.”

5. The rise of AI & automation

What will be the effect of the increasing use of artificial intelligence-derived algorithms and automated technology within data and analytics? Michele Morelli, expanding on her earlier prediction that automation will play a greater role in marketing measurement in 2021, says that, “There will be a shift in skillset both needed “at the table” and within insight teams. As platforms and technology become increasingly important, it will fundamentally shift the skillsets organisations look for in their insights professionals.

“Teams may not feel confident they have the talent in-house to script a survey for panellists on mobile. But those skills will be increasingly crucial as not only does technology adoption become more widespread, but also as organisations realise you can do more with fewer resources through automation.  There is a false sense that you need a larger team to execute what the industry refers to as DIY. But that is 100% inaccurate. And once brands understand this, we will see the skillsets employed shift.”

“2020 could have been the year that predictive analytics went out of the window, had it been reliant on relevant previous pandemic history to feed models,” says Andrew Hood. “Instead it has simply pushed prediction to be more agile: businesses have needed to reforecast faster, more regularly, and in more detail to respond to emerging trends in the market.

“And while there have been plenty of examples in 2020 of the importance of human supervision and accountability for algorithms, the ability to deploy self-learning algorithms has allowed things like recommendation engines to respond quickly to changes in consumer demands. This is only likely to grow in 2021 as those demands continue to evolve.

“2020 might have been the year that the hype around AI in marketing peaked. But it is likely to continue well into 2021, as businesses still tread that fine line between the lure of technical sophistication and successfully identifying real business problems to solve.”

Ben Murphy, UK Managing Director at Quantcast, believes that automation will allow agencies to maximise their resources in 2021 as they focus on consulting to provide value for brands. “As agencies look to bounce back and recoup lost profit in 2021, they should focus efforts on creativity and longer-term strategic planning, utilising their cross-vertical expertise, adding consultancy-driven value for clients. Brands will be relying on agencies for longer-term creative strategies, bolstered by real-time data as they make up lost time on five-year plans.

“Automation can maximise resources as execution is handled by AI, allowing for more time to be spent on consulting and brand management. Critically, automation and machine learning provide marketers with the tools to maximise their clients’ budgets, by responding to emerging micro-trends in real-time, helping them outpace the competition.”

DemandMore’s Wes Parker predicts that automation will become more prevalent in paid media in 2021 thanks to its adoption by the major platforms. “Google has already announced Performance Max campaigns that allow users to buy inventory across all of Google’s properties and formats in a single campaign, and we’re likely to see more automated bidding and campaign features in 2021. With the rise of automation across all platforms, advertisers will have to adapt.”

To succeed, he says, advertisers will need to do two key things: “Firstly, they will need to give the Google and Facebook algorithms the data that they need to make decisions by focusing on analytics. Secondly, they will need to get better at producing compelling creative and testing that creative rigorously. I’m sure we will see more and more data and analytics roles coming onstream in 2021.”

AI, Machine Learning and Predictive Analytics Best Practice Guide

The post Data and analytics trends in 2021: How will strategy evolve in the wake of Covid-19? appeared first on Econsultancy.

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