Dive Brief:

• U.S. ad spending reached $436.3 billion in 2021, a 21.6% year-on-year increase over pandemic-recessed 2020 and the strongest performance for the sector in the last decade, according to the latest annual assessment by Winterberry Group. The management consultancy forecasts growth of 11.8% to $487.8 billion in 2022.
• Data-related spending encompassing identity, analytics, measurement and attribution jumped 26% YoY to $29.3 billion in 2021. With the pending deprecation of cookies and changes to mobile identifiers, Winterberry Group expects the category to gain another 13% this year. Investments will funnel toward first-party data collection, adoption of data management and clean room solutions and a rebound in direct mail for third-party data acquisition.
• Data-related tactics as a percentage of total media spend will grow from 11.6% in 2021 to 12.3% in 2022, Winterberry Group said. Other overindexing areas include retail media marketing, which doubled from $20 billion in 2020 to $40 billion last year, experiential marketing and connected TV marketing.

Dive Insight:

Winterberry Group's assessment of the media landscape is the latest to underpin a remarkable ad market rebound last year in the wake of a grim 2020. Tactically, the industry is shifting focus from an impressions-based approach to one more centered around outcomes, as evidenced by the strength of channels that skew toward performance marketing.

Despite pressures related to the supply chain, inflation and labor shortages, 2022 appears primed to experience further growth, albeit not at the same meteoric level as last year. Winterberry Group analyzed 20 media channels — nine offline, 11 digital — for its report.

"The expectation is that while the rate of growth will be halved in 2022, the macro trends will continue to drive market expansion — though always 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 isn't surprising. Marketers are contending with the deprecation of third-party cookies, to date a key method of online ad targeting. Google is expected to phase out cookies in Chrome sometime next year, a decision that has seismic implications given the widespread adoption of the web browser.

The policy switch-up, which is positioned by Google as safeguarding user privacy, has set off a scramble for alternative solutions, particularly those providing access to first-party data. Meanwhile, a recent change by Apple to make its mobile identifier an opt-in feature by default has already put a dent in the revenue of major platforms and affected campaign performance in a potential omen of the impact cookie deprecation could carry.

Retail media has become a hot item as a result of these disruptions, seeing its spend double between 2020 and 2021, per Winterberry Group. Brands including Walmart, Target, Kroger and CVS have quickly built out advertising networks that tap into their in-store and online shopper data as they look to court the dollars of packaged goods marketers that don't own the point of sale.

Adjacent technologies are also receiving an uptick in interest. Data clean rooms — services where different organizations can dump their respective first-party data and see it anonymized, aggregated and matched — have proliferated, with heavy-hitter platforms like Amazon recently standing up offerings in the space.

With third-party cookies on the chopping block, alternative methods of placing ads are seeing their star rise as well. Contextual targeting, where ads are tailored to the content of websites based on factors like keywords and topics, has picked up more serious traction. A previous report from Winterberry Group found more than half (52%) of surveyed marketers plan to increase their spending on contextual targeting.

Winterberry Group predicted marketers will adopt a wider range of identifiers and move from a testing phase to larger rollouts by the year's end. The firm additionally foresees continued marketing consolidation driven by a heavy influx of venture capital, private equity and public market capital.