US Digital Display Ad Spending to Surpass Search Ad Spending in 2016

In 2016, digital display ad spending will eclipse search ad spending in the US for the first time. Combined, the categories of video, sponsorships, rich media and “banners and other” will account for the largest share of digital ad spending: 47.9%, worth $32.17 billion.

Within the display umbrella, advertisers will invest the most on “banners and other,” a category that includes many types of native ads and ads on popular social sites like Facebook and Twitter, as explored in a new eMarketer report “US Digital Display Advertising Trends: Eight Developments to Watch for in 2016.” Overall, one in five dollars devoted to digital in 2016 will go to “banners and other” digital display ad types. Video will also command a large portion of ad spending allocated to digital in 2016: 14.3%, up from 12.8% in 2015.

Spending growth in the categories of rich media and video will both be significant: 36.4% and 28.5%, respectively. Rich media’s growth will be driven by growing adoption of “out-stream” and in-feed video ad formats, while video will grow due to publishers looking to capitalize on high-demand, high-value in-stream video ad inventory.

While desktop will remain the biggest beneficiary of US digital video ad dollars in 2016, garnering 57.5% of an expected $9.59 billion in spending, the same cannot be said for the remaining display ad formats. Of the $22.58 billion that will go to banners, rich media, sponsorships and other display-based formats in the US this year, 77.5%, or $17.5 billion, will be spent to reach individuals on mobile devices like smartphones and tablets.

On the one hand, numbers like these reveal a vibrant market in which consumer-led media habits (particularly increases in video consumption and mobile device usage) are funneling display ad dollars to the most desired channels and formats.

But while it may seem to the casual observer that in-stream video, in-feed video and mobile are thriving effortlessly, those entrenched in digital display advertising know that growth in ad dollars can only come from painstaking investment in things like cross-device capabilities, programmatic advertising and continual efforts to address issues of ad viewability and fraud. The following trends are the ones that eMarketer believes most likely to affect digital display spending in 2016 and in the next few years to come.

Courtesy of eMarketer