This post is part of G2's 2021 digital trends series. Read more about G2’s perspective on digital transformation trends in an introduction from Michael Fauscette, G2's chief research officer and Tom Pringle, VP, market research, and additional coverage on trends identified by G2’s analysts.
2020 has been a year like no other, or what we’ve become accustomed to saying—an unprecedented year—due to the COVID-19 pandemic. While this article is definitely inconsequential compared to the events of this year, marketers and marketing technology have been significantly impacted throughout the course of 2020.
Marketing teams have needed to adapt to new strategies quickly and precisely while scrutinizing and changing their goals and performance metrics. As 2020 is drawing to a close, I’ve put together a list of four martech and adtech trends that will shape the marketing and advertising landscape in 2021.
There have been countless effects of the COVID-19 pandemic this year, including business operations becoming more fragmented, in part, because of the work from home imperative. There was also an increase in data collection across customer touchpoints, which contributed to the marketer’s challenge of growing existing customer relationships.
This is where CDPs come into play as they assist companies in assembling a comprehensive understanding of their customers over time, enabling them to create more personalized and relevant content and messaging. CDPs help solve the problem of organizing fragmented data coming in from multiple sources by being able to collect data from all available sources, organizing it, tagging it, and making it usable for anyone who needs access to it.
Last year, I predicted that the CDP industry would grow by 45% in 2020. According to the CDP Institute’s semiannual update from July 2020, year-to-date industry revenues are already at $1.3 billion for 2020, up from $1 billion in 2019. Additionally, the CDP industry continued to expand in the first half of 2020, reaching 121 vendors, 9,500 employees, and $2.3 billion in funding.
Despite the general industry slowdown, new companies continue to offer CDPs. The CDP market will continue to expand rapidly throughout 2021, driven by a relentless focus on breaking down data silos.
In 2020, we saw additional enterprise companies launch their own CDPs, as well as step out of beta testing and release their CDPs officially.
During the keynote presentation at SAP’s virtual event, Customer Experience LIVE, SAP announced the launch of its CDP to be available in November 2020. The SAP Customer Data Platform is engineered to tackle four key opportunities to increase brand reach and effectiveness: connecting every data source in the organization, respecting customer data with a holistic data privacy strategy, understanding large volumes of data, and hyper-personalizing engagements based on a comprehensive view of the customer.
Another company that launched their own CDP this year is Zeta Global. Zeta Global’s CDP, CDP+, provides marketers with a customer view enriched with Zeta’s live-signal data and predictive artificial intelligence (AI) scoring to determine a marketing personalization strategy. CDP+ provides many solutions to marketers, including a comprehensive single view of the customer, centralized data, data enrichment, data integrity, measurement and analytics, and live segmentation. CDP+ can also enrich marketers’ data with more than 2,500 intent and interest signals, identity resolution, syndication, and activation from Zeta’s Data Cloud.
Additionally, Salesforce announced their CDP, Customer 360 Audiences, going into beta testing during Dreamforce 2018, and almost a year later, it is officially releasing its CDP to the market. The confirmation came as part of a wider set of announcements around the creation of a new business unit known as Digital 360. Digital 360 will bring together key components and new innovations in the Salesforce Customer 360 platform and will oversee Audiences, a rebranded Community Cloud (now known as Experience Cloud), Marketing Cloud, and Commerce Cloud.
We also saw notable mergers and acquisitions take place in 2020. On November 2, 2020, Twilio officially acquired Segment for $3.2 billion. Twilio, a cloud communications platform, acquired CDP platform Segment to add intelligence to Twilio’s digital engagement channels. According to co-founder and CEO of Twilio, Jeff Lawson, “nearly every company is focused on acquiring, retaining and growing their customer relationships through digital engagement." This ties into why it is expected that the CDP market will continue to grow throughout the rest of the year and into 2021. Over time, the addition of Segment will allow Twilio to integrate data intelligence into Twilio Flex, and Segment will become a division of Twilio and will continue to be led by Segment CEO Peter Reinhardt, reporting to Lawson.
In February of this year, to enhance its CDP offering Customer 360 Audience, Salesforce acquired Evergage. While Evergage is a CDP, it’s likely that Salesforce acquired the company for its cross-channel personalization and machine learning capabilities to complement Salesforce Marketing Cloud’s customer data, audience segmentation, and engagement platform to provide 1:1 personalization experiences. Evergage’s AI-driven recommendations help companies more accurately predict what is most likely to engage individuals at a 1:1 level.
Within G2’s Customer Data Platform (CDP) software category, we ask reviewers questions about software features, including the provision of a recommendation engine, or the use of AI to provide suggestions based on desired outcomes. We ask these questions on a scale of 1-7, 7 being excellent.
The table below displays data for CDP’s category average on G2 for these software features. The category average for the recommendation engine and use of AI to engage individuals with more personalized marketing is 6, and Evergage’s (now Salesforce Interaction Studio) average for this feature question was 5.78.
As a consequence of the COVID-19 pandemic, choosing the right marketing collaboration tools purpose-built for complex marketing teams to work remotely, while supporting every stage of the marketing workflow, is going to be even more important heading into 2021.
According to Jazmine Betz, senior research analyst at G2, work from home policies and fully remote positions are only possible because of innovation in collaboration and communication software over the last 15 years. As remote work continues to evolve, marketers will use collaboration tools to assist with numerous challenges that may arise, including lack of visibility, difficulty visualizing all marketing activity, and managing shifting priorities.
Marketing collaboration tools that companies will most likely utilize even more in 2021 include:
Reviewers on G2 calling out the benefits of utilizing project management tools while working remotely
Cookies, sometimes known as tracking cookies, browser cookies, or third-party cookies, have been the pillar of online audience tracking since the 1990s. Third-party cookies are different from first-party cookies. First-party cookies are generally considered good by marketers as they are created by the host domain and aim to provide a better user experience and keep sessions open. These cookies store all the necessary settings and inputs of the user, so when someone returns to a site, they can retrieve this information, which improves usability. Examples of the type of information these cookies can gather are login data, items added to a shopping cart, usernames and passwords, and language preferences.
Third-party cookies, conversely, are hosted by an advertiser's server, and can record browsing history, user ID, session ID, and collect primarily marketing-relevant information, such as age, origin, gender, and user behavior data. These cookies help marketers create personalized advertising content and messaging, and cookie owners can potentially sell user data to anyone.
In recent years, marketers have become more familiar with the phrase “death of the cookie,” and that can be correlated with an increase in data privacy regulations, such as the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR). On August 14, 2020, the final CCPA regulations were approved and took effect immediately.
The CCPA requires companies to be completely open to consumers about what cookies and trackers are collecting and sharing users’ personal information on their website. The regulation also requires the company to be able to take control of the website’s data collection and sharing if consumers opt out.
In 2021, as marketers rely less on third-party cookies, they will increase their usage of first-party data.
According to the Interactive Advertising Bureau (IAB) State of Data 2020 report (from July 2020), a majority of respondents (57.1%) said they have already increased their use of first-party data for targeting over the past 18 months. Additionally, the use of first-party and contextual data for targeting has increased as data users look to make better use of the data-related resources at their disposal internally. This trend confirms one of my predictions from the article I wrote last year on 2020 martech and adtech trends, that contextual targeting would increase 30% in 2020 due to an increase in data privacy regulations. Contextual advertising scans keywords in the text of the page and renders related ads to that content based on what consumers are searching or viewing.
In January 2020, Google announced that its Chrome browser would begin phasing out support for third-party cookies and would complete this phase-out by 2022, but they were not the first to announce such a move as Apple introduced Intelligent Tracking Prevention (ITP) 1.0, a privacy feature that came with Safari 11, in September 2017. Due to these increased restrictions, and the final phase-out of third-party cookies fastly approaching for some companies, gathering first-party consumer data will become increasingly more relevant in 2021.
First-party data is the information companies collect directly from their audiences or customers. Not only does collecting first-party data enable marketers to comply with data privacy regulations, but it also means that they own this data and can use it to segment audiences and send them personalized marketing content. In a 2019 survey by Harris for Redpoint Global, 63% of consumers said they “expect personalization as a standard of service.” Marketers also use first-party data for cross-channel orchestration and building complete pictures of customers.
An example of a company who has moved away from using cookies is Shopify, which uses web analytics to dictate how consumers are shown personalized ads. Companies have the option to analyze their site traffic to target based on the data collected. Additionally, Google has provided a Privacy Sandbox to help “create a thriving web ecosystem that is respectful of users and private by default.”
One of the digital advertising formats that is expected to increase in adoption in 2020 and 2021 is digital audio advertising, which includes digital radio advertising and podcast advertising. eMarketer reported that US digital radio ad spending will reach $3.72 billion in 2020 and US podcast ad spending will grow 10.4% to $782 million in 2020 (expected to surpass $1 billion in 2021). To reflect this change in the digital advertising space, G2 added a new software category to the Advertiser Campaign Management taxonomy this year, Digital Audio Advertising software.
Due to a variety of factors, not just the shifts in consumer behaviors during the pandemic, digital audio is expected to overtake traditional radio among adult listeners in the next five years. According to the 2019 Infinite Dial report by Edison Research and Triton Digital, the average American over the age of 12 now listens to nearly 17 hours of online audio per week. One digital audio advertising format that is expected to increase in 2021 is podcast advertising.
The opportunities that marketers have with podcast advertising include the following: there are over 700,000 podcasts in over 100 languages, 70% of monthly podcast listeners don't do anything else while listening to a podcast, and 55% of listeners say they’ve purchased something after hearing about it on a podcast.
Streaming audio ads on music streaming platforms will increase in 2021.
One factor driving this increase will be that streaming services have an abundance of first-party data to identify users’ interests and online behaviors, which allows marketers to target the right users at the right time with relevant, personalized ads. Another factor contributing to this increase is the rise of programmatic audio advertising, which eliminated the need for brands to go direct-to-publisher for audio advertising, which is time consuming. One big move towards programmatic took place this year, in August 2020, when Google announced that it is building out its programmatic audio infrastructure and launched a beta of new offerings in Ad Manager and Google’s Demand Side Platform, Display & Video 360 (DV360), for programmatic audio buyers and sellers. This is the first time Google is providing programmatic sales capabilities for audio publishers in Ad Manager.
While this post includes my predictions for 2021, as 2020 has taught us, no one can ever be 100% prepared for the future. All of us can predict trends, and then strategize and plan accordingly, but ultimately it is imperative for marketers to be prepared to shift strategies at any time.
Emily is the market research manager for the applications squad as well as G2's research principal focused on marketing + digital advertising software. She earned her BS in business administration and MBA with a concentration in marketing and business analytics from the Georgia Institute of Technology. She enjoys coaching and volunteering for Girls on the Run, attending concerts, running half marathons, and hiking.
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