Brands: "Your Content is Worth 2% Less in 2021"

Agencies are in the process of delivering some bad news to major media outlets as they wrap the 2021 budgeting process with clients: expect cuts.

Across the board, brands are pushing agencies for a -2% rate of change, a cost that will ultimately be absorbed by content providers. The message couldn’t be any clearer: black hole marketing spend on traditional channels is simply not viable given global economic uncertainty. Content may still be king, but accountability is the new power behind the throne.

"What I’m telling partners is that their content is worth less money to advertisers than it was in 2020," said a top planner for one major global agency. "The COVID-19 epidemic may be the precipitating event, but I frankly don’t see the trend reversing even if we see a full recovery. It’s getting harder and harder to justify CPM based models in a world where virtually everything else is based on measurable performance."

So, is this the long-awaited "extinction event" for traditional media models? Probably not. Traditional media is still an effective way to lift overall performance, and the migration to accountable digital has been underway for quite some time:

Graph: Global digital ad spending beat TV for the first time in 2017
Graph: Digital Ad Spending Worldwide, 2016-2021

However, some of the more forward-thinking brands will inevitably choose to deploy a portion of that 2% in performance-based media, accelerating the trend.

One such brand is the online wine club Tasting Room, which recently shifted spend out of DRTV while increasing digital. "If I can deploy content inexpensively online, optimize that content for performance, and generate meaningful and measurable engagement with my brand without having to spend $100,000 on production alone, it’s kind of a no-brainer in this environment," said Amanda Dames, GM for Tasting Room. "At the end of the day, I’m accountable for performance. I have to acquire high value, long-term customers profitably on the front end. I need my media partners to be aligned with me on that."

Find out more about how you can amplify your marketing strategy with the #1 performance MarTech platform!

Tell Your Story