Trends in Digital Advertising in North America. Presentation covers overall market trends, industry wise trends and top technology trends. Data compiled from various sources over the internet.

1. TRENDS IN DIGITAL ADVERTISING - US
June 2014

2. Market Trends & Growth Statistics
Digital Ad Spending by Industry
Technology Drivers
Challenges in Digital Advertising

3. Market Trends & Growth Statistics

4. •Digital ad spend is set to rise to nearly one-third of the total media ad spend by 2018
•Advertisers are set to invest $204.01 billion by 2018 in digital
Digital Ad Spending Worldwide 2013-2018
Source - eMarketer
•Western Europe accounts for nearly 25% of all digital spending around the world, and other regions make up just a small share
Digital Ad Spending Share, By Region
•Of the total media ad spend across the world, 25% will be spent on digital ads
•The US is still the single biggest spender on digital ads, with nearly 40% of total digital ad dollars this year compared with 28.6% in Asia-Pacific
(In billions & % of total media spending)
(Share for 2014; % of Total)

5. •U.S. digital advertising revenues for 2013 hit an all-time high of $42.8 billion
•This momentous figure marks an increase of 17% from 2012’s landmark revenues of $36.6 billion
Source – IAB/PWC Internet Ad Revenue Report, 2013
Advertising Revenue Market Share, By Media – 2013 (In $ billions)

6. Ad Formats 2012 - $36.6 Bn
Ad Formats 2013 - $42.8 Bn
•For the third year in a row, mobile achieved triple-digit growth y-o-y, rising to $7.1 billion during 2013, a 110% boost from 2012 and accounted for 17% of 2013 revenues
•Digital video, a component of display-related advertising, brought in $2.8 billion in 2013, up 19% from 2012 to increase its share to become the fourth largest format, behind mobile
•Market share of search and display is down by 2-3 percentage points
Source – IAB/PWC Internet Ad Revenue Report, 2013

7. Digital Ad Spending by Industry

8. Digital Ad Spend by Industry, 2012 vs. 2013
•Retail advertisers continue to represent the largest category of digital ad spending, responsible for 21% in 2013
•Financial services comes second with 13% of digital ad spending, closely trailed by Automotive which accounts for 12%
•Digital ad spending contracted in telecom, travel, computing and healthcare
Source – IAB/PWC Internet Ad Revenue Report, 2013

9. The US Retail industry’s advertising spending on paid digital media will reach $11.05 billion in 2014 and rise to $17.39 billion by 2018, with a 12.8% CAGR
Digital Ad Spend by Channel, 2014
(In $ Billion)
Total Retail Ad Spend $11.05 Bn
Digital Ad Spend by Objective, 2014 (In $ Billion)
US retail digital ad spending shows a stronger emphasis on ads meant to trigger sales and leads than those intended to boost brand awareness
Source - eMarketer
Shopping has become a cross-device activity, and advertisers are investing in ways to reach mobile users across all steps in the path to purchase, resulting in increased mobile spend

10. Advertising spending in paid digital media by the US Financial Services industry will hit $6.20 billion in 2014 and rise to $9.57 billion by 2018, with a CAGR of 12.5%
Digital Ad Spend by Channel, 2014
(In $ Billion)
Total FS* Ad Spend $6.20 Bn
Digital Ad Spend by Objective, 2014 (In $ Billion)
The financial services industry continues to primarily leverage digital advertising to support direct- response
Source - eMarketer
Mobile advertising is increasing, driven by broader market trends as well as a concerted push by institutions to get consumers to use mobile financial services
* Note: FS – Financial Services

11. Advertising spending in paid digital media by the US Automotive industry will cross $6.15 billion in 2014 and rise to $10.36 billion by 2018, with a CAGR of 14.9%
Digital Ad Spend by Channel, 2014 (In $ Billion)
Total Auto Ad Spend $6.15 Bn
Digital Ad Spend by Objective, 2014 (In $ Billion)
Automotive industry digital strategy is towards direct response to win sales in the final weeks of the shopping process using tactics like search & programmatic, targeted ads
Source - eMarketer
Mobile-based branding and upper-funnel advertising efforts are increasing in response to evolving consumer research behavior which has shifted to mobile

12. Advertising spending in paid digital media by the US M&E* industry will cross $5.15 billion in 2014 and rise to $8.54 billion by 2018, with a CAGR of 15.1%
Entertainment Digital Ad Spend by Objective, 2014 (In $ Billion)
Media Digital Ad Spend by Objective, 2014 (In $ Billion)
Media companies lean toward lower-funnel objectives such as getting customers to subscribe and drive traffic to digital content
Source - eMarketer
Entertainment companies heavily use video, social and branded/custom programming approaches, which tend to aim for upper-funnel objectives such as driving awareness
* Note: M&E – Media & Entertainment
Total Media Ad Spend - $2.80
Total Entertainment Ad Spend - $2.35
Total M&E Ad Spend $5.15 Bn

13. Advertising spending in paid digital media by the US CPG* industry will cross $4.20 billion in 2014 and rise to $7.04 billion by 2018, with a CAGR of 14.7%
Digital Ad Spend by Channel, 2014 (In $ Billion)
Total CPG* Ad Spend $4.20 Bn
Digital Ad Spend by Objective, 2014 (In $ Billion)
The breakdown has shifted even more in branding’s favor as brand building is among the categories for which CPG CMOs in the US are expected to increase their marketing
Source - eMarketer
Mobile is another area where brands are upping ad spending as they follow consumers who are spending increasing amounts of time on their smartphones
* Note: CPG – Consumer Packaged Goods

14. Advertising spending in paid digital media by the US Travel industry will cross $4.15 billion in 2014 and rise to $6.40 billion by 2018, with a CAGR of 13.4%
Digital Ad Spend by Channel, 2014 (In $ Billion)
Total Travel Ad Spend $4.15 Bn
Digital Ad Spend by Objective, 2014 (In $ Billion)
OTA’s focus on direct-response tactics will drive trends for the industry as a whole. The emphasis on direct response is a function of advertiser familiarity & effectiveness of format
Source - eMarketer
Travel marketers make changes to deal with high mobile device usage. Because of the relative newness of mobile, marketers will experiment with a variety of mobile ad units

15. Technology Drivers

16. Spending on digital video advertising is set to reach $6 billion in 2014
(In $ Billion)
$4.20
$5.96
$7.77
$9.45
$11.11
$12.71
Source – eMarketer, DigitalSherpa
Everyday 100 Million Internet Users watch an online video In a month, the internet user is exposed to an average of 32.2 Videos and spends around 16 Minutes 49 Seconds watching online video ads
Reach of Online Video
Effectiveness of Online Video
80% of internet users remember the video ads they watch online 75% of users visit the marketer’s website after viewing a video Videos increase people’s understanding of a product or service by 74% Website visitors are 64% more likely to buy a product on an online retail site after watching a video
Digital Video is now the fourth-largest Internet ad category with a 7% share & estimated to reach 15.5% in 2018

17. Display $3.38 BN
Search $3.95 BN
Messaging $216 MN
Video $518 MN
Other
$100 MN
Revenue estimates for mobile ad formats
Source – IAB / eMarketer
Estimated 75% increase from 2012
$7.65 Billion
Projected Mobile Ad Spending in 2013

18. The largest social platforms in the world monetize with native, in-feed ads, including Facebook, Twitter, Pinterest, Instagram, and Tumblr
The publishing industry is quickly following suit, as companies - Time Inc, Forbes, Wall Street Journal, New York Times & USA Today are introducing native advertising
25% more consumers were measured to look at in-feed, native ad placements more than standard banners
People See Them
Consumers looked at native ads 2% more than editorial content and spent the same number of seconds viewing
Viewed as Editorial
97% of mobile media buyers report that native ads were very or quite effective at achieving branding goals
Mobile Branding
Native ads registered 18% higher lift in purchase intent than banner ads
Purchase Drivers

19. US Display Ad Spending Share, By Type
•Programmatic ad buying will continue to constitute an ever-larger slice of display-related ad buying in the US
•RTB ad buying will make up the largest share of programmatic buying
Source - eMarketer
American Express plans to shift 100% of its online ad budget to programmatic channels
Mondelez and TubeMogul strike programmatic video advertising partnership
Procter & Gamble wants to buy 70% to 75% of its U.S. digital media programmatically by 2014
Buzz on Programmatic

20. Challenges in Digital Advertising

21. •Consumers concerned about Online Data Privacy
•Platforms for mobile/online advertising and the devices themselves are disparate and ever changing
•Online Ad Fraud scams that flood sites with bot traffic
•Ad Viewability
•Relevant Measurement Metrics

22. Ads are buried low on web pages
Ad platform Vindico found 57% of digital video ads were not viewable. ComScore estimates that 54% of all digital ads are never seen.
Ads run in tiny, easily ignored video players
Ads run simultaneously with other ads
Ads not being seen by a human being
American brands are now spending more than $1 billion a year on marketing that few if any people see
$3 bn a year spent on online video ads 57% of them are deemed unviewable
Source: NYTimes Article – The Great Unwatched

23. Transparency of video ads served
Whitelist of sites
Avoid below the fold inventory
Completion rate as core metric
Mobile video advertising
Cost per view digital buying
Solutions to ensure Viewability

24. Compiled By – Arjun Vazirani Date – June 2014
Email – arjun.vazirani@gmail.com Twitter - https://twitter.com/arjunvazirani LinkedIn - in.linkedin.com/in/arjunvazirani