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Digital Advertising - US - August 2018

"Sales of desktop and mobile banner and video ads have grown dramatically over the years, rising from $10.7 billion in 2013 to $39.3 billion in 2017. However, 2018 is the last year in which sales growth is expected to remain around or exceed 20%. This is likely because access to WiFi and smartphone ownership has nearly peaked. Another contributing factor is the need to maintain budgets in broadcast media in spite of its declining size, due to the perception of its greater impact on viewers, a subject explored in the qualitative panel for this Report."

- Billy Hulkower, Senior Technology Analyst

This report will look at the following areas:

  • Ad-blocking software, limited web users rule out 30% of audience
  • Nearly half remove ads as quickly as possible
  • Only one in four have ever made a purchase

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The issues
            • Ad-blocking software, limited web users rule out 30% of audience
              • Figure 1: When internet ads are noticed, May 2018
            • Nearly half remove ads as quickly as possible
              • Figure 2: Removal of internet ads, by gender and age, May 2018
            • Only one in four have ever made a purchase
              • Figure 3: Purchase in response to online ad – CHAID – Tree output, May 2018
            • The opportunities
              • Repetition effective in sought after demographics
                • Figure 4: Increased interest in products as a result of multiple ad viewings, May 2018
              • Dads buy
                • Figure 5: Purchase in response to online ad, by parental status by gender, May 2018
              • Keeping it simple: discounts and retargeting
                • Figure 6: Ad features that increase the likelihood of a click, May 2018
              • What it means
              • The Market – What You Need to Know

                • Stellar growth returns to ground
                  • Majority of buys in mobile
                    • Majority avoiding ads
                      • Growth in WiFi, mobile devices slowing to a crawl
                      • Market Size and Forecast

                        • 2018 final year of 20% growth
                          • Figure 7: US sales and fan chart forecast of banner and digital video ads, at current prices, 2013-23
                          • Figure 8: Total US sales and forecast of banner and digital video ads, at current prices, 2013-23
                      • Market Breakdown

                        • Mobile takes over
                          • Figure 9: US sales of digital ads, desktop vs mobile, 2015 vs 2017
                      • Market Perspective

                        • Ad-blocking software, limited web usage rule out 30% of audience
                          • Figure 10: When internet ads are noticed, May 2018
                        • Nearly half remove ads as quickly as possible
                            • Figure 11: Removal of internet ads, by parental status, May 2018
                          • Recall greater for video
                            • In their own words:
                            • Market Factors

                              • Growth in WiFi access and smartphone ownership slowing
                                • Figure 12: Home WiFi access and smartphone, tablet, and computer ownership, 2013-23
                              • Problems in TV land
                                • Television audience in decline
                                  • Ad skippers push dollars to digital
                                    • Figure 13: Ownership of television recording and streaming devices, May 2018
                                  • Repetition effective in sought-after demographics
                                    • Figure 14: Increased interest in products as a result of multiple ad viewings, May 2018
                                • Key Trends – What You Need to Know

                                  • Two thirds click
                                    • Purchases rare
                                      • Brave new world of shoppable ads
                                      • What’s Working?

                                        • Young men, especially dads, click
                                          • Figure 15: Demographics with favorable clicking behavior, June 2018
                                        • Discounts and retargeting
                                          • Figure 16: Ad features that increase the likelihood of a click, May 2018
                                        • Impressions made even absent a click
                                          • Figure 17: Paying attention to ads without clicking on them, by select demographics, June 2018
                                      • What’s Struggling?

                                        • Only one in four have ever made a purchase
                                          • In their own words:
                                            • Figure 18: Purchase in response to online ad – CHAID – Tree output, May 2018
                                          • Mass engagement missing in most services/activities
                                            • Figure 19: Services/sites on which ads are clicked and purchases made, May 2018
                                        • What’s Next?

                                          • Shoppable ads
                                              • Figure 20: Interest in shoppable ads, May 2018
                                              • Figure 21: Interest in shoppable ads, by social media sites used, May 2018
                                            • Geo-fencing
                                              • Figure 22: Interest in local mobile ads, by parental status, May 2018
                                            • Increased focus on retail and search
                                              • Figure 23: Online shopping and research activities, December 2017
                                          • The Consumer – What You Need to Know

                                            • Youthful skew intact
                                              • Familiarity helps with clicking
                                                • Parents more likely to purchase
                                                  • Leisure and apparel among top categories for clicks and purchases
                                                    • Room for growth in social activity
                                                    • Reach

                                                      • Penetration highest among Millennial parents, iGeneration
                                                          • Figure 24: Reach of digital ads – CHAID – Tree output, May 2018
                                                          • Figure 25: Reach of digital ads, by age, May 2018
                                                          • Figure 26: Reach of digital ads, by parental status, May 2018
                                                          • Figure 27: Reach of digital ads, by household income, May 2018
                                                        • Blacks, Hispanics more likely to notice ads
                                                          • Figure 28: Reach of digital ads, by race and Hispanic origin, May 2018
                                                      • Clicking

                                                        • Lifestage factors at play in increased clicking behavior
                                                          • In their own words:
                                                              • Figure 29: Number of product categories clicked on, by age and household income, May 2018
                                                              • Figure 30: Mean number of product categories clicked upon, renters vs homeowners, May 2018
                                                              • Figure 31: Number of product categories clicked on, by number of children in the home*, May 2018
                                                          • Purchasing

                                                            • Dads top target
                                                              • Figure 32: Purchase in response to online ad, by parental status by gender, May 2018
                                                            • Luxury may not sell
                                                              • Figure 33: Purchase in response to online ad, by household income, May 2018
                                                            • Younger adults buy
                                                              • Figure 34: Purchase in response to online ad, by gender and age, May 2018
                                                          • Purchasing and Clicking by Category

                                                            • Fashion, discounts, entertainment, and restaurants draw most interest
                                                                • Figure 35: Categories clicked upon and purchased, May 2018
                                                                • Figure 36: Categories purchased in response to a television commercial, October 2017
                                                            • The Social Media User

                                                              • Social carries majority of digital advertising
                                                                • Figure 37: US sales of banner and digital video ads, social vs other, 2015 vs 2017
                                                              • Social media users click
                                                                  • Figure 38: Number of product categories clicked on, by use of social media platforms, May 2018,
                                                              • Appendix – Data Sources and Abbreviations

                                                                • Data sources
                                                                  • Sales data
                                                                    • Fan chart forecast
                                                                      • Consumer survey data
                                                                        • Consumer qualitative research
                                                                          • Abbreviations and terms
                                                                            • Abbreviations
                                                                              • Terms
                                                                              • Appendix – CHAID Methodology and Table Outputs

                                                                                • CHAID Methodology
                                                                                  • Figure 39: Ever makes purchases because of internet ad – CHAID – Table output, May 2018
                                                                                  • Figure 40: Ever notices ads – CHAID – Table output, May 2018
                                                                              • Appendix – The Market

                                                                                  • Figure 41: Total US sales and forecast of banner and digital video ads, at inflation-adjusted prices, 2013-23
                                                                              • Appendix – The Consumer

                                                                                  • Figure 42: Purchase in response to online ad, by race and Hispanic origin, May 2018

                                                                              Digital Advertising - US - August 2018

                                                                              US $4,395.00 (Excl.Tax)