Nearly two-thirds of US digital ad spending in 2016 will go toward mobile
In 2016, eMarketer estimates, digital ad spending will make up 35.8% of total media ad spending in the US, just 1 percentage point below TV’s share. Granted, that percentage point is significant. eMarketer expects outlays on digital ads will hit $68.82 billion this year, while television spending will total $70.60 billion, a $1.78 billion difference.
Still, no other media channel can challenge TV’s dominance of the US advertising market. In fact, spending on every other media channel combined—print, radio, directories and out-of-home—doesn’t come as close to the TV total as the amount spent on all forms of digital advertising, as explored in a new eMarketer report, “Need-to-Know Trends in US Digital Advertising: From Strategy to Budgeting to Mobile, Programmatic, Ad Blocking, Measurement and More.”
eMarketer’s projections for US digital ad spending were revised upward in February 2016 largely due to the Q4 2015 revenues reported by the leading digital advertising publishers, along with key trends in the marketplace. For example, brand marketers are reallocating larger portions of their print budgets to serve ads on desktop and laptop computers, smartphones and tablets. Local ad dollars are also flowing more rapidly to digital, as are the ad budgets of small to medium-sized businesses.
Such trends underpin eMarketer’s bullish outlook for future digital ad spending. They also raise the question of whether businesses that continue to invest the vast majority of their ad budgets in television without regard to the growth of digital advertising should reassess the viability of those plans.
Digital ad dollars used to flow mostly to desktop, but that’s no longer the case. eMarketer estimates that 63.4% of US digital ad spending in 2016 will go toward mobile.
US advertisers will spend $43.60 billion on mobile ads this year, far exceeding the $25.22 billion for desktop. That heavy skew toward mobile is expected to continue. In 2017, mobile ad spending will be nearly twice that of desktop. By 2020, investment in mobile ads will outstrip desktop by nearly $49 billion.
Furthermore, programmatic is becoming powerful. eMarketer estimates that $21.55 billion, or 67.0% of total US display ad spending, will be transacted programmatically in 2016. Of that total, the majority (69.1%) will go toward mobile ads. It’s important to note that all major methods of transacting or fulfilling digital display ads via an application programming interface (API) fall under eMarketer’s definition of programmatic advertising. This includes everything from publisher-erected APIs (common to social media sites and ad networks, for example) to more standardized (real-time bidding) RTB technology.
eMarketer corporate subscription clients can view the full report here.