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Industry Contributor 25 Nov 2020 - 3 min read

Why AI-powered e-commerce and QR codes are going to be massive in 2021

By Sarah Keith, Managing Director - Paykel Media

After a year that everyone would like to forget, what are some of the key trends and developments that will roll into 2021 and what’s the outlook for media ad spending?

Key points:

  • The green shoots we are seeing in media ad spending in this quarter will continue into 2021, as categories such as automotive, travel, food and financial services come back to life.
  • Assuming they go ahead, the Tokyo Olympics will bring a renewed sense of normalcy in people’s lives.
  • QR codes are here to stay in the hospitality sector and beyond, leading to an explosion in the data companies collect on their customers.
  • The e-commerce boom of 2020 will continue next year, with online retailers spending ever more on artificial intelligence and augmented reality.
  • The streaming platforms will continue to evolve, as demonstrated by Netflix France’s surprising decision to launch linear channels.
My Takeout:

Coming to the close of a year that saw complete non-precedence across all industries and countries, now marks a good time to take stock of what was learnt and what changes might be here to stay.

Going into 2020 after what was, from a media ad market perspective, a pretty lacklustre 2019, I was reassured thinking about the power the Olympics would have mid-year to engage and excite consumers, followed by a US Presidential election at the end of the year to really bring us home strong. Of course, my optimism would be short-lived.

At the start of the year, I was concerned that more streaming platform launches would mean more leakage of eyeballs away from broadcast TV, and e-commerce was growing to a point that I was wondering when Amazon would become the default in the way Google had for search and Facebook for social.

So, what exactly did the year bring from a media and marketing point of view?

Who could have predicted that the QR code would come into its own, or that linear TV audiences would grow, or that Netflix would trial a linear channel because consumers have “decision fatigue?”

I can guarantee that no one would have predicted an uplift in paint, home gym equipment and campervan sales. 

 

TV and video

The streaming platform market is booming and here in Australia, we have been teased by BritBox launching throughout the year, as well as numerous new services including Binge and ViacomCBS’s upcoming Paramount+. This is great for consumer choice but continues to drive eyeballs behind the paywall.

Surfacing new content in a passive way is not new, but it’s interesting that it has moved to the SVOD space. With more choice than ever before, discoverability of content is more even more difficult.

In the pay TV world, key players are introducing virtual playlist channels, comprised of linear schedules from BVOD sites. This classic programming strategy has appeal: networks built the audiences for shows such as Friends, Frasier, Seinfeld and The Big Bang Theory through consistent scheduling and repeats of previous seasons. It’s not surprising, therefore, that Netflix has begun to trial its own linear channel in France.

 

AI powered e-commerce

Moving on from TV, the e-commerce business has had a great year and will continue to thrive and evolve in 2021. Every day, more and more retailers are making the increasingly short leap to online selling. According to Juniper Research, online sellers will spend $US7.3 billion worldwide on artificial intelligence (AI) by 2022. ABI Research predicts that more than 120,000 stores in the US will be using augmented reality (AR) technologies to offer customers a rich buying experience by 2022.

AI acts as your online in-store associate by offering personalised guidance and recommendations to your customers. Online shoppers, of course, can’t try on or physically inspect the product they are thinking about buying. AR removes this hurdle by letting customers see how a certain product would look on them before they buy it.

 

Running the numbers

After shrinking 5.3% during 2019, the Australian media ad market is likely to finish this year down 22% (excluding government spending). There are some green shoots in this quarter, with the capital city free-to-air TV networks reporting strong demand, some radio networks seeing a bounce back in revenue and regional media reaping the benefits of the Boomtown marketing push it launched last year.

Those green shoots are likely to continue into 2021, as the economy slowly recovers from this year. We are already seeing signs of life in categories such as automotive, travel, food and financial services. The Tokyo Olympics will provide cheer and a renewed sense of normalcy in people’s lives.

E-marketer expects total media ad spending worldwide to rebound to pre-pandemic levels in 2021, hitting US$691.5 billion. Driving this rebound will be strong growth in digital ad spending globally, at 16.4% in 2021, more than double the 7.9% growth that traditional media spending will see next year. The US and China will lead the charge and expect other markets to follow suit. 

 

QR code curveball

I mentioned the QR code. Sorry, but it’s here to stay. Australians seem to be a relatively obedient cohort and now that we have been trained to accept QR codes almost everywhere we go, they will become an important part of the marketing landscape. That will lead to an explosion in the data companies collect on their customers and a resultant increase in more targeted marketing campaigns.

As we prepare to (gladly) leave 2020 behind, we should be prepared for 2021 to have its time in the sun, bringing with it a resurgence in digital and traditional media ad spend, bolstered by rapid expansion in technology.

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Sarah Keith, Managing Director

Paykel Media

Sarah Keith is one of Australia’s most experienced and respected media and advertising executives. Her resume includes senior roles at Publicis Groupe, Network 10, Fairfax Media, Fox Sports, SBS, Austereo and Channel 4 in the UK. In early November this year she joined Paykel Media as Managing Director.

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