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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.)

US Ad Spending for 2012

2012 US Ad Spending by Media

From the IAB’s report on US ad spending for 2012. Digital ad spending is up 15% over 2011, with retailers (20%) and financial services (13%) representing the biggest spending sectors.

US Online Advertising 2012 Without Google

It’s interesting, though, to imagine this chart (as I’ve hacked together, above) if you remove one company from it, Google. When you subtract out international revenue and the former Motorola business (see Marketing Land), and you multiply the difference by 96% (the share of Google’s revenues that come from advertising), Google’s US ad revenues for 2012 were nearly $19 billion. Pulling Google out of the mix, US advertisers spent less than $18 billion on internet advertising last year — somewhere between newspapers and radio.

Nearly 100% of DVR Users Skip Commercials

According to a recent survey of 5,800 mainstream US TV viewers, 93% of people are watching more TV than they were last year. A lot of that growth, however, is coming from TV-watching on the Internet (more than half are viewing some TV online, 15% are watching more than 6 hours per week online) and time-shifted viewership by way of DVRs, which increased for 71% of survey respondents. Among those using DVRs, 96% are skipping the commercials. Ninety-six percent!

The topic of commercial-skipping gave birth to one of my all-time favorite headlines, from Outside the Beltway last year: “86% Skip Commercials (14% Can’t Find Remote).” The good news is, I guess, that 10% of people have cleaned up their living rooms, gotten themselves organized, and now they can locate their remote controls.

Facebook’s 140 Billion Photos Represent 4% of Photos Ever Taken By Humans

“Ten percent of all the photos we have were taken in the past 12 months,” says Jonathan Good on the blog for 1000memories, a photo organizing and sharing site.

Digital cameras are now ubiquitous — it is estimated that 2.5 billion people in the world today have a digital camera[6]. If the average person snaps 150 photos this year that would be a staggering 375 billion photos. That might sound implausible but this year people will upload over 70 billion photos to Facebook, suggesting around 20% of all photos this year will end up there[7]. Already Facebook’s photo collection has a staggering 140 billion photos, that’s over 10,000 times larger than the Library of Congress…. In total we have now taken over 3.5 trillion photos.

Facebook’s 140 billion photos is 4% of the 3.5 trillion photos every taken by humans. In ten years, that number will be one in five (at least).

Kantar Media Report on US Ad Spending, First Half 2011

Kantar Media’s report on US ad spending for the first half of 2011 (full infographic) shows the Q2 year-over-year investment up 2.8% over 2010, slower growth than in Q1, which was up 4.4% over last year. TV is still the biggest piece of the ad-spending pie, but growth is coming from national syndication (up 18.5%) and cable (up 11.8%), not the big networks (down 7.6%). Internet advertising added up to nearly $12 billion in the first half, with 57% coming from paid search. The five biggest spenders: Progressive, Verizon, Experian, GM and AT&T.

Marketshare: US Online Display Ad Spending

From Wall Street Journal’s article AOL Growth Comes At A Cost, which says “[AOL] isn’t earning enough money selling ads on those sites to cover its costs for a profitable business, analysts say.”

Web Usage Outside of Facebook is Shrinking

Growth of Facebook, Decline of Web

In the early days of Federated Media, we started new-prospect meetings with a chart that showed one line going up and to the right (“Internet usage is growing”) and another line going up more steeply (“usage of conversational media such as blogs and social networking sites is growing faster”).

Time to update that chart! The latest numbers from Comscore (the same source we used back in 2006) show that without Facebook, the Internet is actually shrinking.

More at Business Insider.

Online Display Ad Spending to Pass Paid Search by 2015

eMarketer predicts US marketers will spend $12.33 billion in online display advertising (including online video, banner ads, rich media and sponsorships) versus the $14.38 billion they’ll spend on search advertising. By 2015, display spending will surpass search.

eMarketer display v search spending thru 2015

“The rise of display advertising, in particular online video, goes hand in hand with a rise in usage of digital advertising for branding. Online advertising, long considered primarily for direct response, still leans in that direction. But branding is increasing in importance as better ad vehicles develop for this purpose and market dollars flow.”

More at eMarketer.

Google’s Top Paid Search Advertisers in Q1 2011

Amazon: $35.1 million
AT&T: $34.6 million
State Farm: $28.7 million
Capital One: $28.1 million
Expedia: $24.3 million
Progressive Insurance: $22.9 million
Geico: $20.9 million
Chase: $20.8 million
Verizon: $18.8 million
Scottrade: $17.5 million

Those 10 alone spent $252 million with Google in Q1, up 57.5% from Q1 of last year according to Kantar Media. More at Mediapost, including an emerging marketing arms race among the online travel sites.

Twitter Followers More Valuable than Facebook Fans

Twitter v Facebook, Value of Fan/Follower

Full story at eMarketer.