Rising digital ad spend

The marketing industry will reach a new milestone in 2019, as digital ad spend is expected to surpass traditional forms of media.

According to figures published by eMarketer, U.S. ad spend will hit $238.82 billion, with digital spend accounting for 54.2 percent of the market. (1) The researchers expect digital spend will hit $129.34 billion and traditional to hit $109.48 billion. In addition to these figures, Mobile Ad spend is expected to surpass all traditional media by 2020, representing 43 percent of all total media ad spend. (2)

One of the biggest takeaways from these reports is total online media buys are expected to reach $172.29 billion by 2021; Market researchers expect the digital spend to grow by over $40 billion, roughly 33 percent, in a brief two years. In addition, digital ad spend is expected to account for more than two-thirds of the total marketing spend. This drastic increase is less of a wave and more of a tsunami that will leave companies behind if they have yet to jump on the digital bandwagon.

This is the exact reason why Transformation Marketing makes digital marketing a cornerstone of our online strategies. Digital advertising has risen for years and the passing of the torch from traditional to digital was inevitable. We saw this coming and made sure to incorporate this into our marketing strategies.

The winners and losers

Another major finding in the eMarketer report is Amazon is disrupting Google and Facebook’s grip on the digital ad market. Google’s share of U.S. ad spend is expected to drop from 38.2 percent to 37.2 percent, while Amazon’s ad business is expected to grow more than 50 percent and consume 8.8 percent of the market share. This trend emerges from the surge in online eCommerce shoppers. as the form of online shopping grows and becomes increasingly more convenient for customers. Plus, eCommerce sites can collect in-depth behavioral data on consumer purchasing behavior that traditional forms of media simply cannot provide. This data can then be purchased as second-party data, only furthering advertisers’ incentives to use these platforms.

Facebook, Inc. is expected to slightly increase their ad spend share in spite of the recent data scandals. Much of this growth will come from the Facebook-owned Instagram, whose ad spend numbers are growing three times faster than Facebook. (3) Facebook, Inc. is still treading in the wakes of the company’s scandal, but whether it plummets or rises above is yet to be determined.

Digital Ad Spend to Surpass Traditional in 2019. Click to Tweet

Location-targeting news

In a separate report, eMarketer also expects location-targeting ad spend to reach $26.5 billion in 2019. (4) Location-targeting ads have grown tremendously in recent years, especially since the rise of mobile. 36 percent of mobile app users said they’ve made an in-store purchase after receiving a location-based push notification. This could turn into a vital strategy for retail-based and local stores.

The future of data

There is more to the increase in digital ad spend than just consumer trends. Companies and advertisers also benefit from the more focused behavioral data collected on the web that simply cannot be collected through traditional means. But what direction is this type of data heading toward?

Consumer data privacy was a hot-button topic in 2018 and the issue is not going away this year as the world searches for answers. Many consumers feel they lack control over their personal data, as U.S. search interest for “my activity” is 6 times higher than in 2016, according to Google. (5) This uncertainty will not crush digital ad spend, but raises more questions than answers in regards to the future of online data and how it will affect advertisers.

 

 

Sources
  1. eMarketer Editors. “US Digital Ad Spending Will Surpass Traditional in 2019.” EMarketer, EMarketer, 19 Feb. 2019, www.emarketer.com/content/us-digital-ad-spending-will-surpass-traditional-in-2019.
  2. eMarketer Editors. “Mobile Ad Spending to Surpass All Traditional Media Combined by 2020.” EMarketer, EMarketer, 16 Oct. 2018, www.emarketer.com/content/mobile-ad-spending-to-surpass-all-traditional-media-combined-by-2020.
  3. Gesenhues, Amy. “As Advertisers Pull Back on Facebook, Instagram’s Ad Spend Growth Rate Is Booming.” Marketing Land, Marketing Land, 20 Feb. 2019, marketingland.com/as-advertisers-pull-back-on-facebook-instagrams-ad-spend-growth-rate-is-booming-246265.
  4. Editors, eMarketer. “Location Intelligence Roundup.” EMarketer, EMarketer, 11 July 2018, www.emarketer.com/content/location-intelligence-roundup.
  5. Downey, Sean. “Gaining Trust & Protecting Consumer Data – Think with Google.” Google, Google, 2019, www.thinkwithgoogle.com/marketing-resources/data-measurement/consumer-trust/.

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