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WinterberryGroup US Online Media Spending Review Outlook Feb2020Online media spend in the US totaled $145.3 billion in 2019, up 19.1% over 2018. The coming year looks like another strong one for digital media spend, with total investments expected to reach $166.4 billion, an increase of 14.5% from last year, per a report [download page] from Winterberry Group. Here’s a breakdown of spending on each channel, ordered by the amount of spend last year.

Search

The greatest portion of US digital media spend continues to go towards search, a finding that aligns with IAB data on US digital ad spending. In 2019 media spend on search increased by 13.2% y-o-y to $54.8 billion. Search ad spending will continue to climb this year, per the report, though at a slower rate of 11.2%, reaching $60.9 billion.

Display

Display ad spending enjoyed an increase of 21% last year, totaling $36.4 billion, as it continues to narrow the gap with search. In the coming year, Winterberry Group estimates that spending on display media will hit $41.9 billion, with its 15.1% year-over-year increase again outpacing search.

Paid Social

Paid social spending also continues to rise at above-average rates, with the Winterberry Group data indicating that spend climbed to $36.2 billion (up 23% y-o-y) in 2019. With an expected 17% y-o-y lift of 17%, spending on paid social is predicted to hit $42.3 billion this year and overtake display.

New research from Nielsen has found that marketers are less confident in their ability to measure ROI from social media than other channels including email. Even so, the marketers surveyed for the same report do perceive social to be an effective channel, and primary research from MarketingCharts indicates that social ads are indeed effective in influencing younger generations’ purchase decisions.

Email/SMS

As with the other digital channels analyzed, email/SMS experienced an increase in spending in 2019 (16.2% to $5.2 billion), and is expected to increase again this year (by 12.6%, $5.8 billion).

Digital Video (OTT/Streaming)

With about two-thirds (65%) of US adult TV viewers streaming content weekly — three-quarters (75%) of whom view on a device other than a TV set — it’s not surprising that media spend on digital video (OTT/streaming) jumped by 40.7% y-o-y in 2019. Spending on OTT/streaming media is forecast to increase by another 31.6% this year, which would bring the total investment to $5 billion.

OTT advertising in particular is garnering plenty of buzz these days, but it’s worth noting that marketers feel that some obstacles remain, the most notable of which are measurement challenges.

Digital Out-of-Home

Digital out-of-home did not have quite the same level of growth last year as the other digital media channels examined in the report, being the only to clock in in the single-digits. Nonetheless, DOOH’s 7% growth last year is expected to be matched again this year, with total spend climbing to $3.7 billion. That remains considerably below the estimate for traditional outdoor advertising, although it’s worth noting that PwC expects physical and digital out-of-home to almost reach parity in spending in 2023.

Digital Audio (Radio/Podcasts)

As on-demand music streaming consumption hit new highs last year and podcast listenership also increased, so did marketing investment in digital audio, up 30% over the prior year for a total of $2.9 billion. In 2020, the growth in spending is expected to slow somewhat (to 15%) and reach $3.4 billion.

Influencer

Influencer spending growth in 2019 was the highest of all online channels, sky-rocketing 70.5% y-o-y and reaching $2.6 billion. Growth in spending is estimated to be considerably lower in 2020 (+32.4%), yet the expected $3.4 billion spend could be money well spent. Indeed, a survey from Valassis and Kantar found that Millennials are more likely to try a new product recommended by an influencer, and also claim to have more trust in advertisements featuring an influencer or celebrity.

Data Services

Data and data services spend also experienced growth in 2019, up 5% y-o-y to a total of $21.7 billion. This increase was largely due to growth in online data and data services spending, with digital media (data, analytics, data technology) spending up 14.4% y-o-y (to $8.2 billion) and email data, database analytics, and hygiene up 22.4% (to $2.9 billion). Spending on offline data such as TV data and analytics (-1.7%) and offline data (data, database analytics, hygiene; -5.5%) did not fare as well.

While spending on data and data services is on the rise, fewer organizations report being extremely data-centric in 2019 (8%) than they did in 2016 (24%). However, 4 in 5 do report they are now either somewhat (42%) or fairly (39%) data-centric.

The full report can be downloaded here.

About the Data: Data is based on Winterberry Group spend estimates.

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