Retailers’ mobile ad spending to jump 52 percent in 2016

The retail sector is expected to dominate digital advertising spending from now to 2020.

According to the most recent forecast from New York-based market research company eMarketer, retailers – who already invest the most in online and mobile ad spending – are going to spend the most on digital advertising in the United States through 2020; spending an estimated $23.04 billion in paid digital media ads. This represents a compound annual growth rate of 12 percent over a period of five years.

Digital ad spending is forecasted to surpass TV ad spending in 2017.

This year, alone, the market research company predicts that retail marketers will pay $15.09 billion in digital ads, which is a 15 percent jump from last year and accounts for 22% of online ad spending in the US.

Mobile Ad SpendingAside from retailers, eMarketer’s estimates show that the automotive industry will remain the second largest digital ad spender through 2020, with car marketers potentially spending $8.7 billion on digital ads in the US in 2016 and up to $14.14 billion by 2020.

Following the automotive industry is financial services, which is forecasted to invest $8.37 billion in 2016 and $12.4 billion by 2020. Taking the fourth and fifth largest digital ad spender spots is Telecom and consumer packaged goods, respectively.

With the digital ad spending growth expected to continue, eMarketer predicts that next year, companies will spend more money on digital ads than TV advertisements.

An estimated two-thirds of retailers’ digital ad budgets have shifted to mobile ad spending.

This year, approximately $10.09 billion of retailers’ digital ad budgets have shifted to mobile. In order to keep up with online shoppers, eMarketer forecasts that retailers will boost their mobile ad spending by 52 percent in 2016, which is up from their 2015 budgets.

This jump in mobile advertising investment for this year does not come as much of a surprise as more and more consumers are engaging in mobile shopping. According to Forrester Research, by 2018, mobile commerce will account for over 50 percent of all e-commerce transactions.

That being said, currently, not all US mobile users are entirely comfortable with the full shopping and buying experience over their mobile devices, with many finding the experience frustrating. Still, buying aside, mobile has completely altered how consumers conduct their pre-purchase research.

Mobile commerce is projected to grow both in the US and globally, which is motivating retailers and other industries to not only focus on shelling out for digital ad spending but mobile ad spending, too.

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