Analysts and experts have labeled COVID-19 “the digital accelerant of the decade.” In the first weeks of March 2020, the advertising sector braced for potential collapse; a collapse that never came. While eMarketer predicted that overall ad spending would decline by 4.9% worldwide last year, digital ad spend was estimated to see 2.4% growth1, showing that while purchasing had certainly changed, it didn’t stop. To understand new market dynamics, we want to understand and reflect on key factors that have shaped this new consumer reality.

Consumer Comfort vs. Trial

Looking at consumer behavior over the past 10 months, there are two key, but slightly discordant themes that emerge: consumers are drawn to comfort items and practices, but they are also more open to trying new things. 

A key piece of this comfort approach is a growing homebody sentiment, most noticeably in the first half of 2020. Looking across countries including the US, UK, France, Germany, Spain, Italy, India, Japan, Korea, and China, in July McKinsey found that 70% of people still did not feel comfortable resuming out-of-home activities.2 Even as things opened up, consumers felt uncomfortable doing things such as shopping for groceries, working outside the home, and getting together with friends and family.2 With the economy in flux, we are also seeing consumers be more thoughtful about their spending habits. They are paring down to the essentials and trying lower cost products.2

But on the other end of the spectrum, brand loyalty is changing. COVID-19 caused supply-chain disruptions, forcing consumers to try out new brands. While this trial was initially considered to be a short-term shift, in the US, more than 60% of consumers who tried a new brand or behavior amid the pandemic plan to stick with it post-crisis.2 As marketers, there is a real opportunity to gain market share, but to do so, your brand must be prominent enough to be a part of the new consideration set.

Move to Digital First

But whether it be for comfort or trial, consumers are leveraging digital channels for how they socialize, work, and even think. Looking at “Digital Adoption by Industry,” COVID has accelerated digital strategy by an average of six years.3 Banks have transitioned to remote sales and service teams and they have launched digital outreach to customers. Grocery stores have shifted to online ordering and delivery. Schools in many places have pivoted to 100% distance learning and digital classrooms. Doctors diversified the way they engaged with patients, adding telemedicine via virtual appointments. To grow in the post-COVID world, companies must prioritize their digital channels and system strategy so they are on par with or better than their competition.

The adjustment to remote working has undoubtedly changed our social interactions. Accenture has dubbed this the “Virtual Century” because “it will affect ways of communicating across learning, working, transacting and consuming.”4 Video conferencing has certainly changed the way we see people’s lives — we see cameos from children, significant others, and pets — creating blurred lines between our personal and business lives. But this has also changed our adoption of technology. For example, e-commerce categories have seen more than 10% growth in online customers, while other contactless services are also seeing a much higher adoption rate, and many at-home solutions will be adopted for the long term.5

Digital Ad Spend is Up

As people are more reliant on their computers and digital devices, we have seen ad dollars shift from traditional media to digital. GroupM highlighted digital advertising as the “bright spot” for advertisers in 2020, taking over half of ad spend for the first time.6 This positive trend is expected to continue into 2021. According to eMarketer, US programmatic digital display ad spend will exceed the previous 6% growth estimate, climbing to 10.4% growth or $65.74 billion dollars in this year.7 The tug-of-war for ad dollars between online and traditional media seems to have a decisive winner, with the pandemic predicted to be the catalyst that finally recognizes the efficiency and reach of digital media.

The pandemic has upped the pressure for companies to step up their game or to step out of the space. Some players are finding ways to thrive because they have a strong mission and value proposition, they are preparing for a liquidity crunch, leaning into a diversification of clients, and thinking long term about what the future may hold. Others who do not have a long-term strategy and have not positioned themselves well with consumers during the pandemic,  will be forced out.

Quantcast is thinking about the future, and we are focused on what that will look like – from balancing consumer privacy and personalization to the impact of and solution for a cookieless world – we are having these conversations and we are planning for what lies ahead.

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  1. Global Digital Ad Spending Update Q2 2020, eMarketer, Jul 6, 2020
  2. Consumer sentiment and behavior, McKinsey & Company, July 8, 2020
  3. COVID-19 Digital Engagement Report, Twilio, Q2-2020
  4. COVID-19: 5 new human truths that experiences need to address, Accenture, April 3, 2020
  5. Consumer sentiment and behavior continue to reflect the uncertainty of the COVID-19 crisis, McKinsey & Company, July 8, 2020
  6. eMarketer, US digital ad spend will make up 51% of total ad dollars, a ‘bright spot’ in 2020, Dec 3, 20207 eMarketer, Increases in total digital ad spending lead to increases in programmatic display ad spending, Dec 28, 2020
  7. eMarketer, Increases in total digital ad spending lead to increases in programmatic display ad spending, Dec 28, 2020