US Ad Spending Trends

We forecast that total US digital ad spending will reach $129.34 billion in 2019, up 19.1% from last year. Within those massive figures lie many stories about industries being upended and digitally transformed.

In the US, retail will remain the largest vertical, and its digital ad spend will grow 19.1% in 2019, the same growth rate as US total digital ad spending. Retail ad budgets continue to grow at a steady pace as retail stalwarts battle disruption from Amazon and other digitally savvy companies.

While US financial services’ share of overall ad spend will remain flat for the next two years, financial services will surpass automotive to become the second-largest ad spending vertical due to automotive’s slowdown in ad growth. Finance firms are increasing their digital budgets, particularly for mobile, to target millennials. At the same time, automotive ad budgets are constrained by macroeconomic conditions like tariff, climate regulations and emission standards and changing consumer behaviors driven by technological change.

In 2020, travel will overtake CPG as the fifth-largest US digital ad spending vertical. Shifting consumer tastes are leading to more mergers in CPG, which are flattening ad budgets. Meanwhile, increased competition and a strong economy is causing travel companies to increase their marketing budgets.

US healthcare and pharma ad spend is growing at a similar pace to other verticals, but overall budgets remain small due to FDA regulations and strict privacy laws. Healthcare and pharma will remain the smallest ad spending vertical. We anticipate that healthcare and pharma will account for just 2.8% of total US digital ad spend in 2019 and 2020.

Telecom advertising will account for 10.4% of total US digital ad spending in 2019 and 10.3% in 2020. Computing products and consumer electronics will represent 8.0% of total ad spend in 2019 and 8.1% in 2020. Mobile will account for 70.0% of total telecom digital ad spend this year and 73.6% in 2020, which will make telecom the most mobile-driven vertical we cover. Since telecom firms provide mobile plans and hardware, mobile ads are a practical and relevant way to reach their consumers.

US media and entertainment companies are increasing their digital ad spend at a greater rate than other verticals due to competition among digital video and gaming platforms as well as surging revenues in the music and film industries. Media digital video ad spend will increase 22.9% this year and entertainment video ad spend will increase 23.5%. Nearly four in 10 media and entertainment ad spend dollars will go toward video in 2019. These companies are using video ads to sell their video products.

UK Ad Spending

In the UK, no single industry will account for more than 15% of total digital ad spend this year. However, retail will lead the pack and will be the only industry to spend in excess of £2 billion ($2.67 billion), accounting for 14.7% of total spend. At the other end of the scale, the financial services industry will spend £1.75 billion ($2.33 billion), which will account for 11.9%.

The two industries arguably most affected by Brexit—automotive and financial services—will see muted growth in digital ad spend this year and next. While most industries we track will post double-digit growth in 2019, financial services (9.4%) and automotive (9.2%) will only see single-digit growth this year.

Mobile, unsurprisingly, will see the biggest growth in spend across all industries. However, desktop spend increases will be seen for automotive, retail and travel sectors.

We expect total digital ad spending in the UK to increase 11.2% in 2019 to £14.73 billion ($18.57 billion). In 2020, UK advertisers will spend £16.21 billion ($20.43 billion) on digital ads.

Germany Ad Spending

Retail will be the largest ad spending vertical in Germany in 2019—an estimated €1.64 billion ($1.94 billion)—and continue to be the top spender throughout our forecast period. Automotive will rank second by this measure, investing €1.04 billion ($1.22 billion) in digital ads this year.

CPGs will be the lowest ad spending vertical in Germany this year, at €0.35 billion ($0.41 billion). CPG brands in Germany—as elsewhere—have always relied heavily on television ads to build reach and consideration, and TV remains a major feature of their media plans. But digital ad spending is picking up, especially as these brands ramp up their efforts to target smartphone users.

Financial services and healthcare and pharma will have strong ad spending growth in Germany. We expect spending on digital ads by financial services companies will grow most in 2019, at 11.2%, to €0.68 billion ($0.80 billion). The healthcare and pharma sector will record a robust annual rise too, at an estimated 10.7%.

We expect advertisers in Germany to spend €7.28 billion ($8.59 billion) on digital ads this year and €7.93 billion ($9.36 billion) in 2020.

All of the above is just a taste of the data and forecasts on ad spending that we have analyzed. For an in-depth look at the verticals and ad spending in each country, explore the full report collection.

authors

Ross Benes