Already the heaviest spenders in digital and mobile ads, retailers are going to dominate online spending through 2020, according to the latest forecast
from eMarketer.
This year, the New York-based market research company says retail marketers will shell out $15.09 billion in paid digital media ads, which represents a 15% jump from last year.
And in the omnichannel sprint to keep up with online shoppers, it forecasts that retailers will crank up mobile ad spending 52% this year. About two-thirds of retailers’ digital ad budgets — $10.09 billion — this year have shifted to mobile, up from 52% of its budget last year. That amounts to 23.2% of all mobile ad spending in the United States.
The shift comes at a time when retailers are still stumbling as they try to follow customers through the online landscape.
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There’s no question consumers are increasingly apt to shop online: Forrester recently forecast that online retail sales in the U.S. are likely to zoom to $500 billion by 2020, compared to $373 billion in 2016. And it also estimates that about $1.5 trillion of total U.S. sales are in some way Web-influenced.
(Increasingly, though, retailers who have been excelling in omnichannel efforts, including Nordstrom and Michael Kors, have admitted that strong e-commerce sales have been cutting into profits.)
But while mobile ads may be soaring, mcommerce efforts still haven’t found their groove, with 78% of shoppers who have tried to use their phones to buy something saying they’ve found the experience frustrating.
EMarketer, while estimating that retailers are likely to be the top-spending industry for the next four years, with about one-fifth of all spending, also sees big gains in:
* Automotive, which continues in the No. 2 spot with $8.71 billion this year, set to reach $14.14 billion by 2020. Mobile spending is expected to hit $5.25 billion, about 60% of total digital ad spend.
* Telecom spending is expected to hit $7.55 billion this year, and $11.10 billion by 2020. But eMarketer predicts the category’s share of the digital spending — about 11.2% this year — will slip a bit to 10.6% by 2020. (About two-thirds of its spending goes to mobile.)
* Digital spending for consumer packaged goods is likely to reach $5.97 billion on digital advertising in 2016, an 18.2% gain from 2015, accounting for 8.7% of total digital ad spending across industries, with 60.2% of spending going to mobile.
* Media and entertainment is expected to come in at $7.34 billion this year, climbing to $11.52 billion by 2020, as consumers increase their appetite for online news and entertainment.
* Pharmaceuticals and healthcare, the smallest of the top 10 verticals eMarketer measures, with $1.93 billion in digital spending, up from 15.4% in 2015. That’s about 2.8% of all digital spending, and projected to reach 3% by 2020.