Schedule a Tour
Does My Company Subscribe?
Spending on digital sponsorship ads—a category that can encompass socially shareable ads as varied as logo placements, banners and pre-roll video ads, streaming concerts, brand-created articles, and “Most-Amazing” listicles—is on a strong growth trajectory, according to eMarketer’s latest US ad spending forecast.
eMarketer estimates sponsorship spending in the US will rise 22.1% this year, from $1.54 billion in 2012 to $1.88 billion. By 2017, spending is expected to exceed $3 billion. While sponsorship still makes up only a small share of digital spending—less than 5%—total dollars spent are nevertheless significant.
Much of this growth comes as more ad publishers seek revenue beyond traditional banners—most often in the form of so-called native executions found on sites like Buzzfeed, Mashable, and Vice Media, and, increasingly, on sites like the New York Times, the Wall Street Journal and other large publishers. Increased tablet usage, especially, is helping drive sponsorship placements in digital newspapers and magazines.
Given sponsorship’s evolution into forms and channels that barely existed just a few years ago, it’s difficult to measure spending accurately. And as with any digital ad format, definitions vary.
For example, many sponsorship spending estimates—including eMarketer’s—look at ad spending, counting media purchases only. Nonadvertising marketing costs—for example, the cost of producing the creative—are excluded. Meanwhile, emerging ad formats, such as sponsored posts on Facebook, are currently included in display ad spending totals.
Estimates from other firms vary widely, mainly because of the differences in terms and methodologies. eMarketer’s figure is among the highest because we merge both mobile and online sponsorship in our estimates.
Many research firms—including eMarketer—look at numbers from the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) either as benchmarks or yardsticks when modeling their own digital marketing estimates. The IAB and PwC do not include mobile in their sponsorship category; rather, mobile sponsorship dollars generally are lumped under mobile. So, IAB and PwC estimated that sponsorship made up only 2.3% of US digital ad revenues in 2012, and spending fell by 24.6%.
The comparative estimates from five research firms put digital sponsorship spending between $690 million and $2.07 billion this year. By 2015, there will be even greater divergence among researchers’ projections, with Jefferies forecasting $3.02 billion and Barclays Capital expecting spending to decrease to $540 million.
Again, how researchers define sponsorship, what gets included and the assumptions about the market are the primary causes of such large variations.
The same variances are present when comparing sponsorship ad spending growth rates. Even as Jefferies, JMP Securities and eMarketer all expect double-digit growth each year from 2013 to 2015, J.P. Morgan expects a flat market while Barclays projects a severe drop.
eMarketer bases its estimates of digital sponsorship ad spending on the analysis of reported revenues from major ad-selling companies; data from benchmark sources the IAB and PwC; estimates from other research firms; consumer internet usage trends; and eMarketer interviews with executives at ad agencies, brands, online ad publishers and other industry leaders.
Corporate subscribers have access to all eMarketer analyst reports, articles, data and more. Join the over 750 companies already benefiting from eMarketer’s approach. Learn more.
Join eMarketer for a free webinar:
Thursday, September 17, 1pm ET
Space is limited.
made possible by
You've never experienced research like this.
Nearly all Fortune 500 companies rely on us.
Inquire about corporate subscriptions today.