2016 Sees Display Ad Spend Overtake Search In U.S.

Marketers in the U.S. will spend more on display than search advertising in 2016, according to numbers released by eMarketer Monday. This year, spending for display advertising will reach $32.17 billion -- up from $26.15 billion. Search advertising is expected to reach $29.24 billion, up from $26.53 billion.

Martín Utreras eMarketer senior forecasting analyst, told Search Marketing Daily that mobile and social are mostly driving the change. "In social a lot of direct response, which once went straight to search, now seems to work better on social with native," he says. "It's creating a shift."

Marketers are also putting more of their budgets into video, he says. Search marketers will need to learn how to integrate with other formats.

The trend is expected to continue through 2019, eMarketer estimates. Display will rise to $37.20 billion in 2017, $41.87 billion in 2018, and $46.69 in 2019. Search will rise to $32.32 billion in 2017, $36.41 billion in 2018, and $40.60 billion in 2019.

"I think the key observation here is the way eMarketer buckets together social, video and native media into the 'display' category," says Mike Grehan, chairman of SEMPO and CMO and managing director at Acronym. "If eMarketer created a 'biddable' media category instead, display wouldn’t look that good, perhaps."
Grehan says it depends on the way analysts slice and classify each piece of the digital marketing pie. It's still his belief that search, as a line item, gets the Lion's share of the digital marketing spend.

Segmenting the U.S. digital ad spend by device and format will see mobile display reach $21.58 billion in 2016, rising to $26.21 billion in 2017 and $29.83 billion in 2018, and $33.70 billion in 2019. On desktop, eMarketer estimates those numbers coming in at $10.58 billion, $10.98 billion, $12.05 billion, and $12.99 billion, respectively.

Search will take $18.54 billion on mobile in 2016, rising to $22.18 billion in 2017, $25.11 billion in 2018, and $28.25 billion in 2019. On desktop, eMarketer estimates those numbers coming in at $10.70 billion, $10.13 billion, $11.30 billion, and $12.35 billion, respectively.

Desktop also remains the biggest beneficiary of U.S. digital video ad dollars in 2016, taking 57.5% of an expected $9.59 billion in advertising spend. Of the $22.58 billion that will go to banners, rich media, sponsorships and other display-based formats in the U.S. this year, 77.5% -- or $17.5 billion -- will be spent to reach individuals on mobile devices like smartphones and tablets.

Overall, combined video, sponsorships, rich media, and banners and others will account for the largest share of digital ad spending, about 47.9%, worth $32.17 billion.

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