Emarketer says display ads will eclipse paid search in 2016

Digital display advertising spending will surpass search advertising spending in the United States for the first time in 2016, according to eMarketer. This information was reported in an eMarketer article about its new report “US Digital Display Advertising Trends: Eight Developments to Watch for in 2016.” The ability to accurately measure mobile ads, atop the proliferation of mobile devices and increased consumption of content from them, is driving this important change.

The banner ad is is definitely not dead; it’s finding new life in new formats. According to eMarketer’s ad-spending trends for 2014 to 2019, the “banners and others” category is expected to grow from $13.39 billion in 2016 to $17.68 billion in 2019. The “others” include newer advertising types like native advertising, according to eMarketer, and are likely contributing to the growth.

Above: eMarketer: U.S. Digital Ad Spending by Format, 2014-2019

Image Credit: eMarketer

The strong projections about display advertising also result from how eMarketer defines the “display” category, which includes fast-growing types of advertising such as rich media and video. One could argue that eMarketer’s display advertising projections are too optimistic in the face of ad blocking. An Adobe and PageFair report said that U.S. ad blocking grew by 48 percent in 2015.

So back to search advertising: Is it really under threat? Search is certainly not declining. Search spending is expected to grow 39 percent to $40.60 billion in 2019. Search advertising has become the darling of marketing since it’s so highly measurable.

“When you can put $X in and get some multiplier of $X out, you’ll be a popular member of the marketing team because you get to use real revenue terms instead of marketing terms such as impressions, views, and engagements,” said VentureBeat Insight analyst Jon Cifuentes. “Rich display, banners, and even video theoretically see broad reach across channels but are typically ‘brand-building’ exercises — a less-popular board room term than revenue.”

But mobile is changing all that.

“Mobile inserts itself into this dynamic and is rapidly becoming a measurable acquisition and brand building channel,” said Cifuentes. “This gap will close in the coming year in a significant way.”

Marketers are underinvesting in mobile, but that’s quickly changing, as described in the VentureBeat Insight report “Brands and mobile advertising: How to win.”

According to the eMarketer study, search spending will grow 52 percent on mobile from 2016 to 2019, as compared to 15 percent on desktop. But other vehicles are expected to grow more. For example, video ad spending is expected to grow 54 percent during this period; mobile video advertising is expected to grow 67 percent.

As the mobile spending gap closes, traditional ad vehicles like search and banners will face competition and will have to evolve to compete.