Digital sponsorship ads will see a 22.1% hike in spending this year, to almost $1.9 billion in spending, forecasts eMarketer, with a big caveat attached. That caveat regards the definition of digital sponsorship ads, which eMarketer says includes “socially shareable ads as varied as logo placements, banners and pre-roll video ads, streaming concerts, brand-created articles, and ‘Most-Amazing’ listicles.” Combining mobile and online sponsorships into its estimates, eMarketer acknowledges that methodological differences can cause a wide swing in forecasts, which range from $0.69 billion this year on the low side (from Barclays Capital) to $2.07 billion on the high side (courtesy of Jefferies).
The definitions can also result in vastly different trend projections. For example, while eMarketer sees strong (yet declining) growth rates on the horizon, other outfits see a decline in sponsorship spend. The latest revenue report from the IAB and PwC, for example, found digital sponsorship ad spend to have declined by 24.6% last year – although eMarketer points out that the report does not lump mobile dollars into the sponsorship category. eMarketer handily aggregated the various projections into a table, reproduced above with eMarketer’s growth estimates included.
Despite the differences in perspective arising from what is a difficult category to define, one thing seems clear: native ads seem to be on the upswing and be a primary growth driver. But wait – native advertising suffers from a definition problem of its own! And for something capturing so much buzz, awareness of native advertising among consumers is very low, and native ads such as Facebook Sponsored Stories also tend to be misleading to consumers. It’s almost ironically appropriate that eMarketer does not include ads such as Facebook Sponsored Stories in its sponsorship estimates, preferring to include them instead in display ad spending estimates.
The point is not that the forecasts aren’t worth paying attention to, but rather that interested parties take a close look at the methodologies presented when reading through them.
About the Data: eMarketer says it bases its estimates of digital sponsorship ad spending on the analysis of reported revenues from major ad-selling companies; data from benchmark sources the IAB and PwC; estimates from other research firms; consumer internet usage trends; and eMarketer interviews with executives at ad agencies, brands, online ad publishers and other industry leaders.