Internet Advertising Is Peaking

eMarketer predicts that spending on desktop ad banners will peak in 2014 at $39.35 billion, and then will slide south in subsequent years as digital ad dollars move to mobile. By 2017 ad spending on non-mobile banner ads will be down around 2012 levels.

Digital Ad Spend by Channel 2011-2017

A major reason for the shift toward mobile is simple: With more than half of US mobile users now on smartphones, and time spent with mobile devices increasing each year, many digital publishers are looking to shift ad revenues to mobile. Smartphones and tablet devices also account for a growing portion of US retail ecommerce sales, further contributing to advertisers’ desire to shift dollars away from desktop.

Logical enough.

But I have to wonder if there’s something else. Since the beginning, the banner-industrial complex* has been measuring its success by clicks, even though we’ve all seen the data telling us a single-digit percentage (8% back in 2009) of Internet users are responsible for that vast majority (85% in 2009) of all clicks on banners. Those heavy clickers, meanwhile, tend not to come from the demos that most advertisers intend to reach.

And it gets worse. The latest numbers from Comscore show that 46% of desktop banners are never seen by human eyes. On ad exchanges like Google’s AdX, according to Piper Jaffrey, that number might be as high as 80 to 90%.

Were it not for the industry’s own bad behavior, I expect that eMarketer chart would have a longer up-and-to-the-right curve to it. Let’s not blame it all Apple and Samsung for making such cool mobile gadgets.

(*I think Brian Morrissey came up with that phrase.)

  1. # Tac Anderson said: June 17th, 2013 at 12:10 pm

    Mobile is when they’re more likely to act on something than when they’re at work behind their company laptop. But there are plenty of messages and instances (especially B2B, or when they’re home on the weekend shopping online) where targeting them on desktop makes more sense.

  2. # Marianne Herring said: June 28th, 2013 at 6:22 pm

    eMarketer estimates that U.S. digital ad spending will climb to $41.9 billion this year, up 14 percent over 2012, with $7.7 billion–and the bulk of incremental growth in digital advertising overall–going toward mobile ads. Desktop ad spending will increase from $34.29 billion in 2013 to $35.39 million in 2014 before sliding back to $35.26 billion in 2015, falling all the way to $32.51 billion in 2017, just slightly above the amount spent last year. Both desktop banner and search advertising are expected to experience flat or declining growth in 2014 for the first time ever, eMarketer adds.

  3. # Joni Spence said: June 28th, 2013 at 7:39 pm

    The shift will be dramatic for banners as well, with 37.2 percent of banner ad spending coming from mobile by 2017.

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