Retailers to Remain Tops in Digital Ad Outlay

Businesses continue to make the shift to digital advertising. In some industries, this transition is speeding ahead. retailstoreRetailers, in general, have embraced digital advertising, and account for $1 out of every $5  spent in the format, according to eMarketer.

The retail industry’s mammoth presence in the online ad industry isn’t that surprising when you consider that these businesses typically make up the second largest group of ad buyers overall in the U.S. Usually, only the automotive industry spends more.

This year, retailers will spend $9.42 billion on digital ad spending, or 22.3% of the total. By 2017, analysts say retailers will be spending about $13.5 billion on their digital marketing which will represent 22% of the total digital ad world.

Retailers spend heavily on paid search and SEO. This tactic, which is part of the $6.09 billion retailers will spend on direct response this year, allows them to compete efficiently, even with manufacturers which are sometimes channel partners, but increasingly, competitors for online sales. Analysts note that direct-​response spending is fairly stable throughout the year.  Retailers allocate about 35.4% of their online spending to branding. These campaigns tend to be seasonal in nature and often include display or digital video ads. Retailer branding campaigns are also likely to be aligned with spending in social media and traditional formats in order to make an impression on their target audiences.

Have you been working with retailers on their digital ad campaigns this year? Do you agree that they are spending more on direct response throughout the year?

[Sources:  Kantar Media Q 2 2013 Ad Spending. KantarMedia​.com. 9 Sep. 2013. Web. 18 Sep. 2013; Retail Industry Remains Largest Spender U.S. Digital Advertising. Emarketer​.com. 2013. Web. 18 Sep. 2013] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.