Data Marketing Spend Surpasses $29 Billion in US as Cookie Deadline Approaches
- U.S. ad spend hit $436.3 billion in 2021, a 21.6% year-on-year increase from 2020 on the back of the pandemic and the industry’s best performance in the past decade , according to the last annual evaluation by Winterberry Group. The management consulting firm forecasts growth of 11.8% to $487.8 billion in 2022.
- Data-related spending encompassing identity, analytics, measurement and attribution jumped 26% year-over-year to $29.3 billion in 2021. With the impending deprecation of cookies and changes to mobile IDs, Winterberry Group expects the category to grow another 13% this year. Investments will be directed to first-party data collection, adoption of data management and cleanroom solutions, and a rebound from direct mail to third-party data acquisition.
- Data-driven tactics as a percentage of total media spend will increase from 11.6% in 2021 to 12.3% in 2022, Winterberry Group said. Other areas of over-indexing include retail media marketing, which grew from $20 billion in 2020 to $40 billion last year, experiential marketing, and connected TV marketing.
Overview of the dive:
Winterberry Group’s media landscape assessment is the latest to document a remarkable ad market rebound last year following a dismal 2020. Tactically, the industry is shifting from an impression-based approach to a a more results-focused approach, as evidenced by the strength of performance marketing-oriented channels.
Despite supply chain pressures, inflation and labor shortages, 2022 looks set to see further growth, although not at the same blistering level as last year. Winterberry Group analyzed 20 media channels – nine offline, 11 digital – for its report.
“It is expected that even though the growth rate will halve in 2022, macro-economic trends will continue to drive market expansion – albeit still subject to macro-economic and COVID-related impacts,” Bruce Biegel, senior managing partner of Winterberry Group, said in a statement.
A continued boon for the data category is not surprising. Marketers are struggling with the abandonment of third-party cookies, to date a key method of online advertising targeting. Google is expected to phase out cookies in Chrome next year, a move that has seismic implications given the web browser’s widespread adoption.
The policy change, which is positioned by Google as protecting user privacy, has sparked a rush for alternative solutions, especially those providing access to first-party data. Meanwhile, a recent change from Apple to make its mobile ID a default opt-in feature has already hurt the revenue of major platforms and the performance of affected campaigns in a potential harbinger of the impact that cookie impairment might have.
Retail media has become a hot topic in the wake of these disruptions, seeing spending double between 2020 and 2021, according to Winterberry Group. Brands such as Walmart, Target, Kroger and CVS have quickly set up ad networks that mine their in-store and online shopping data as they seek to woo money from packaged goods merchants who don’t own the point of sale.
Adjacent technologies are also attracting renewed interest. Data cleanrooms – services where different organizations can dump their respective first-party data and see it anonymized, aggregated and matched – have proliferated, with heavy platforms like Amazon recently standing offerings in space.
With third-party cookies on the chopping block, alternative methods of ad placement are also seeing their star rise. Contextual targeting, where ads are tailored to website content based on factors such as keywords and topics, has gained momentum. A previous report from Winterberry Group found more than half (52%) of marketers surveyed plan to increase their contextual targeting spend.
Winterberry Group predicted that marketers will adopt a wider range of identifiers and move from a testing phase to larger rollouts by the end of the year. The company further anticipates continued marketing consolidation through a massive influx of venture capital, private equity and public market capital.