Tag: emarketer

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.

Aside 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.

Consumers are slow to warm to the mobile commerce space

Mobile transactions are slated to see strong growth in the United States this year, but the mobile commerce space may be facing significant challenges that could be difficult to overcome. A recent study from eCash shows that approximately on 20.7% of people in the United States make use of the new Apple Pay service. Other services may be popular among consumers as they have been around longer, but many consumers may simply be uninterested in mobile payment services, largely due to security concerns.

Apple Pay users do not frequently use the service to make purchases

Of those using Apple Pay, approximately 56% use it only once a week. Another 15.3% say they have never used the service. While consumers consider mobile payments to be convenient, there are numerous reasons why they are not using their mobile devices to purchase products. Security may be the most significant concern that consumers have as the mobile commerce space has become a target for malicious groups that want to exploit consumer information for their own gain.

Security remains the greatest concern among consumers

Security is the biggest barrier preventing consumers from using mobile payment services. According to a report from eMarketer, 57% of Internet users in the United States cited security concerns as the main reason they did not use mobile wallets. Another 62% of smartphone owners in the country said that they do not plan to use mobile wallets because of worries regarding the security of their information.

Lack of a global standard slows the adoption of mobile payments among consumers throughout the world

Security is not the only problem facing the mobile commerce space. Currently, there is no global standard governing the mobile payments space. There are no common interfaces that makes mobile commerce universally recognizable among consumers. Once a global standard is set, however, it will allow consumers to use any application to shop online and in physical stores, using their devices to make purchases that they are interested in.