In 2021, eMarketer expected digital ad buyers in the US would spend about $191.09 billion, a 25.5 percent increase from 2020 and the largest in absolute terms since it started tracking these metrics five years ago.
The firm’s latest research, “US Digital Ad Spending by Industry,” reveals what channels consumers gravitated toward and what drove ad investments in 2021 across 10 industries: automotive, computing products and consumer electronics, consumer packaged goods, entertainment, financial services, healthcare and pharma, media, retail, telecom and travel.
Growth By Industry
In 2021, every industry raised ad spending by at least 10 percent.
After a difficult 2020, entertainment digital ad spending surged as movie theaters and amusement parks reopened.
Retail grew by 34.5 percent, an impressive figure given its spending growth has never dropped below 20 percent.
CPG expanded by 31.7 percent while computing products and consumer electronics posted strong growth of 29 percent as consumers relied more heavily on ecommerce.
Emarketer predicted travel would see a turnaround of about 70 percentage points in 2021 though not anywhere close enough to recover from its pandemic-driven declines. It also anticipated auto’s digital ad spending would grow by 20.5 percent.
Media was expected to increase digital ad spending by 21.1 percent in 2021 while healthcare and pharmacy was expected to expand by 11.6 percent.
Share By Industry
Retail has accounted for more than 20 percent of the US digital ad market since eMarketer started tracking these metrics by industry. In 2021, it forecasted retail would account for 24.9 percent of all money spent on digital advertising. By the end of 2023, retail’s market share will reach 26.6 percent, more than double that of every other industry besides CPG.
Six of the 10 industries eMarketer analyzed are waning in relative significance for the overall market due to retail’s rapid expansion. As a result, for the rest of eMarketer’s forecast period of 2022-2023, CPG and entertainment are the only industries that will become more significant year after year.
Computing products and consumer electronics will also continue to see strong growth and maintain an 8.6 percent share of the US digital ad spending market.
Mobile Ad Spending
Also last year, eMarketer predicted ad buyers in the US would spend $129.79 billion n mobile formats, which will account for 68 percent of total digital ad spending compared with the 17.5 percent increase mobile ad spending saw in 2020.
Entertainment, computing products and consumer electronics, CPG, financial services and telecom would devote more than 70 percent of their digital ad budgets to mobile, eMarketer said.
Retail was predicted to be the largest spender on mobile last year, followed by CPG, financial services, and computing products and consumer electronics.
Travel has traditionally leaned more toward nonmobile than other industries but as consumers are more comfortable booking trips on mobile, eMarketer expected it would spend 58.9 percent of its digital ad budget on mobile.
For the first time last year, financial services would spend 70 percent of their digital ad dollars on mobile, according to eMarketer’s 2021 prediction.
Non-Mobile Ad Spending
Mobile ad spending has drawn more share from nonmobile over time however connected TV (CTV) is shaking things up and becoming a booming channel for digital ad spending. Last year, eMarketer anticipated CTV ad spending would increase by 48.6 percent to reach $13.41 billion and will continue to grow faster than on mobile until 2023.
Emarketer also predicted US digital advertisers would allocate $61.29 billion to nonmobile channels in 2021, with retail spending the largest chunk at $16.68 billion.
Healthcare and pharma, travel, and auto have slowly embraced a mostly mobile spending strategy over the past few years and all three will join the new trend of splitting their budget between mobile and nonmobile.
In 2021, entertainment, retail and CPG increased their nonmobile spending faster than the other verticals, which aligns with their high growth rates for digital ad spending overall.
Search Ad Spending
Travel had always spent the most on search among the verticals eMarketer tracks until 2020 when it reduced its spending on the format by 54.2 percent—a number so substantial it materially affected Google’s bottom line in Q2 2020.
Emarketer’s 2021 prediction was that every industry would expand its search spending by at least 10 percent, with major recovery coming from entertainment, CPG and retail. The firm forecasted these three would grow their spend by more than 30 percent.
While retail leans toward display, it was to spend $20 billion, or 43.5 percent of its budget, on search in 2021, eMarketer predicted. The firm also forecasted that CPG and financial services would spend more than $10 billion on search in 2021.
Display Ad Spending
Emarketer predicted display ad spending would accelerate to 27.4 percent in 2021 and cool off somewhat this year and in 2023. Retail again leads here, followed by CPG, financial services, and computing products and consumer electronics.
It also anticipated that entertainment, computing products and consumer electronics, telecom, and auto would spend at least 62.2 percent of their digital budgets on display in 2021.
Video Ad Spending
Emarketer’s display ad figures include spending on video, which it considers a subcategory of display.
The prediction here was that in 2021, video ad spending would reach $55.34 billion—or 51 percent of all display ad spending. That would make it the first year that video accounts for more than half of the display format.
By the end of 2022, eMarketer predicts video will capture just over 30 percent of all digital ad spending. That’s not far behind search, which will drop to a 39.4 percent share.
Last year, retail was expected to spend the most on video, $12.14 billion. Entertainment and computing products and consumer electronics heavily leaned into video both within their display budget and overall. The former was expected to spend 42.6 percent of its entire digital ad budget, or $4.75 billion, on video in 2021.