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Pandemic Fuels Growth of US B2B Digital Ad Spending

Healthcare, the fastest-growing category, will jump more than 40% in 2020

 

August 10, 2020 (New York, NY) – The US B2B digital ad ecosystem is not only insulated from the crash of the broader digital ad market, but also growing because of the pandemic, not in spite of it.

In 2020, US B2Bs will spend $8.14 billion on digital ads*. That’s up 22.6% from 2019, when US B2Bs allocated $6.64 billion to digital advertising, according to our August 2020 forecast. For comparison, total digital ad spending in the US will grow just 1.7% this year to $134.66 billion.

“When B2B marketers lost the ability to connect with buyers in-person, digital ads had to work overtime and have been the primary way of targeting their audiences,” said Jillian Ryan, eMarketer principal analyst at Insider Intelligence. “B2Bs are relying on desktop ads to reach buyers during the pandemic, as work-from-home orders keep buyers in front of their computers and away from their mobile devices. Sponsored webinars and virtual events through publishers are popular, as are search and social media ads.”

Yet, as US B2B digital ad spend substantially grows, the total B2B advertising market made a significant downturn. According to our first-ever estimate for this figure, US B2Bs will spend $21.42 billion on advertising in 2020, a 9.6% drop from 2019 when B2Bs allocated $23.71 billion. In 2019, total B2B ad spend grew 10.8%. This big decline is driven by paused investment in traditional media, such as TV, radio, print and out-of-home, as well as abandoned plans to use traditional advertising to promote large-scale industry conferences. But we do anticipate the market to recover with a 20.4% increase to $25.79 billion in 2021, when B2Bs start to increase their spend and events resume.

“B2Bs increasing spend on digital while significantly reducing spend on traditional is a big deal when considering the B2B industry’s historical underutilization of digital advertising,” Ryan said.

 

B2B DIGITAL AD SPEND BY INDUSTRY

The healthcare sector is the fastest-growing B2B digital ad market, jumping 41.2% this year over 2019. This one industry saw almost double the growth of the total US B2B digital market.

“This spike is driven by advertisers harnessing the high demand for medical supplies and personal protection equipment,” Ryan said. “Increases in pharmaceutical and biotech supply chain operations during this health crisis and surging needs for hospital service companies should be another bright spot for this category.”

This year, the B2B tech products and services category will spend $2.41 billion on digital media, a 37.2% increase from 2019 when this sector spent $1.76 billion. The growth in this category also outpaces the total US B2B digital growth trend of 22.6%, making it the second-fastest-growing industry in our forecast.

“B2B tech companies help enable digital transformation and have therefore been insulated from marketing budget cuts and are using digital advertising to acquire new buyers that weren’t in-market before COVID-19 hit,” Ryan said.

Another sector sustaining B2B digital ad spending during the pandemic is financial services. The US B2B financial services sector will spend $2.20 billion on digital advertising in 2020—a growth rate of 28.0%.

“Financial services firms are using digital advertising to boost their brand reputation and seize opportunities to help their clients,” Ryan said. “Fintech companies, such as providers that enable early wage access and digital payment processors, are driving up spend in this category.”

US B2B telecom firms will spend $1.15 billion on digital ads in 2020, up 28.3% from 2019, when almost $900 million was allocated.

“B2B advertisers in this industry recognize how remote work has created a need for faster services, reliable connections, heightened security and more bandwidth at home,” Ryan said.

The travel sector is the only category that will shrink this year. B2B digital travel ad spending will fall 44.5% in 2020. Last year, B2B travel firms allocated $549.7 million to digital advertising, but the coronavirus lockdowns caused a crash in spend, dropping to just $304.9 million in 2020—the lowest amount for any year in our forecast period.

“The future of B2B travel is very uncertain. Even when restrictions are lifted, companies might not feel safe letting employees travel for business. And even as in-person conferences resume, hybrid events—that mix virtual and physical elements—could become the new norm in a post-coronavirus economy.”

 

* eMarketer’s estimates for the US B2B digital ad market include the advertising of products and services to businesses or other organizations for use in the production of goods, business operations and resale. This is in contrast to any advertising aimed at individual consumers

 

 

 

For more information, contact:

Douglas Clark
Global Director of Public Relations
646-863-8807
dclark@emarketer.com

Corinne Weir
Public Relations Coordinator
646-863-8814
cweir@emarketer.com

Posted on August 10, 2020.