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Digital Advertising - US - August 2019

Covered in this report

For the purposes of this report, digital advertising includes internet delivered ads in paid search advertising, digital video ads, banner advertising and other forms of digital advertising that includes but is not limited to email acquisition, audio streaming, classified ads, lead generation services and apps.

"Digital advertising is a $125 billion industry and is estimated to account for more than half of total advertising spending following robust growth across all segments including banner, video and search. Growth is expected to continue, albeit at a slightly slower rate than in years past, indicating that the digital ad market is reaching maturity. Digital media consumption continues to rise as new streaming services enter the market and consumers switch to internet-based media."

- Buddy Lo, Senior Technology Analyst

This report will look at the following areas:

  • Consumers routinely come across irrelevant ads
  • Four in 10 use two or more methods to avoid digital ads
  • Privacy and personal information are sensitive areas for consumers

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • Key takeaways
            • The issues
              • Consumers routinely come across irrelevant ads
                • Figure 1: Digital ad results, May 2019
              • Four in 10 use two or more methods to avoid digital ads
                • Figure 2: Number of ad-avoidance methods used, May 2019
              • Privacy and personal information are sensitive areas for consumers
                • Figure 3: Digital ad behaviors, May 2019
              • The opportunities
                • Marketers need to go where the people are, and that’s digital
                  • Figure 4: Total US digital advertising revenue, by segment, 2014-24
                • Brands looking for a younger audience must have a mobile presence on social media
                  • Figure 5: Daily smartphone activities, October 2017-November 2018
                • Marketers can be more aggressive in using data to pursue Generation Z
                  • Figure 6: Attitudes toward digital advertising – Personal information, by generation, May 2019
                • What it means
                • The Market – What You Need to Know

                  • Digital advertising spending still growing, just not as quickly
                    • Digital video advertising forecast for rapid growth
                      • Regulations could shake up the digital advertising industry
                        • Digital assistants could become the next search engine
                        • Market Size and Forecast

                          • Digital advertising spend could double by 2024
                            • Figure 7: Total US digital advertising spend and fan chart forecast, at current prices, 2014-24
                            • Figure 8: Total US digital advertising spend, at current prices, 2014-24
                        • Market Breakdown

                          • Growth in volume, breakouts remain the same
                            • Figure 9: Breakout of US digital ad spend, by segment, at current prices, 2018-19
                          • Paid search the largest, yet slowest, growing segment
                            • Figure 10: Total US digital paid search advertising spend and fan chart forecast, at current prices, 2014-24
                            • Figure 11: Total US retail sales and forecast of paid search advertising spend, at current prices, 2014-24
                          • Digital video shows highest potential growth
                            • Figure 12: Total US digital video advertising spend and fan chart forecast, at current prices, 2014-24
                            • Figure 13: Total US digital video advertising spend, at current prices, 2014-24
                          • Banner ad spend will grow alongside social media
                            • Figure 14: Total US digital banner advertising spend and fan chart forecast, at current prices, 2014-24
                            • Figure 15: Total US digital banner advertising spend, at current prices, 2014-24
                        • Market Factors

                          • 5G should increase connectivity and bandwidth
                            • Digital assistants could be the next search engine
                              • Digital TV increase will lead to spike in digital video ads
                                • New regulations could make it harder for marketers to reach consumers
                                  • Levies on large tech companies could impact digital ad market
                                  • Key Players – What You Need to Know

                                    • Facebook revenues continue growth
                                      • Shopify brings ecommerce solutions to small businesses
                                        • Snapchat’s user growth stalls
                                          • 5G could enable new wave of geolocation-based advertising
                                          • What’s Working?

                                            • The Trade Desk revenues show consistent growth
                                              • Figure 16: The Trade Desk annual revenue, 2014-18
                                            • Facebook hits more than $55 billion on revenue
                                              • Figure 17: Daily Instagram users, by Generation Z and Millennials, January 2017-May 2019
                                              • Figure 18: Facebook yearly revenue, 2014-18
                                            • Shopify brings digital solutions for small businesses
                                              • Figure 19: SmallBiz Ahead communication email, July 2019
                                            • Hulu a growing marketplace for digital video advertisers
                                              • Figure 20: Hulu video advertising stats, January 2019-July 2019
                                          • What’s Struggling?

                                            • Snap Inc. shows revenue growth, but uncertain profitability
                                              • Figure 21: Daily snapchat users, by Generation Z and Millennials, January 2017-May 2019
                                              • Figure 22: Daily Instagram users, by Generation Z and Millennials, January 2017-May 2019
                                          • What’s Next?

                                            • Digital voice assistants could take over search engines
                                              • More geo-location based ads will arrive in a 5G environment
                                                • Connected devices could unlock new ways to interact with consumers
                                                  • Augmented Reality Ads
                                                    • Figure 23: Facebook CES exhibit, January 2019
                                                • The Consumer – What You Need to Know

                                                  • Marketers need to be on mobile
                                                    • Irrelevant ads a problem for digital advertising
                                                      • One in five consumers use three or more methods to avoid ads online
                                                        • Consumers know they are tracked and privacy is a concern
                                                          • Companies aren’t trusted custodians of personal data
                                                          • Digital Devices Used

                                                            • Consumers use a wide variety of digital devices
                                                              • Figure 24: Devices used in the past seven days, October 2017-November 2018
                                                              • Figure 25: Mobile phone ownership and type of phone used, 2011-18
                                                            • Digital video platforms will be key to reaching younger consumers
                                                              • Figure 26: Devices used in last seven days – TV and streaming media devices, by gender and age, October 2017 – November 2018
                                                            • Opportunities for cross-platform advertising due to second screening
                                                              • Figure 27: Activities while watching TV, October 2017-November 2018
                                                            • Gaming platforms effective at reaching men 18-34
                                                              • Figure 28: Video game console use in last seven days, by gender and age, October 2017-November 2018
                                                            • Web browsing and social networking top daily activities on smartphones
                                                              • Figure 29: Daily smartphone activities, October 2017-November 2018
                                                              • Figure 30: Time spent on smartphones, by activity, October 2017-November 2018
                                                          • Digital Ads Viewed

                                                            • Email and social media news feed ads get the most recognition
                                                              • Figure 31: Digital ads viewed in the past seven days, May 2019
                                                            • Digital strategy necessary to reach younger consumers
                                                              • Figure 32: Digital ads viewed in the past seven days, by age, part 1, May 2019
                                                            • Email and display ads better at reaching older consumers
                                                              • Figure 33: Digital ads viewed in the past seven days, by age, part 2, May 2019
                                                            • Social, audio and video ads should prioritize mobile
                                                              • Figure 34: Devices used to view digital ads, May 2019
                                                          • Digital Ad Results

                                                            • Nearly half of consumers served irrelevant ads
                                                              • Figure 35: Digital ad results, May 2019
                                                            • Display ads less likely to target the right audience
                                                              • Figure 36: Digital ad results, by digital ads viewed, May 2019
                                                            • Digital ads most effective among younger men
                                                              • Figure 37: Digital ad success, by gender and age, May 2019
                                                            • Audio streamers more engaged with digital advertising
                                                              • Figure 38: Digital ad success, by digital ads viewed in the past seven days, May 2019
                                                          • Ad-avoidance Methods

                                                            • Marketers play cat and mouse with consumers online
                                                              • Figure 39: Ad-avoidance methods, May 2019
                                                            • Age and gender have minimal impact on ad-blocking usage
                                                              • Figure 40: Ad-avoidance methods – Ad-blocking software, by gender and age, May 2019
                                                            • Millennials most likely to provide fake email information
                                                              • Figure 41: Ad-avoidance methods – Fake email information, May 2019
                                                            • Audio streamers more likely to pay for ad-free access
                                                              • Figure 42: Ad-avoidance methods – Pay for ad-free experience, by digital ads viewed in the past seven days, May 2019
                                                              • Figure 43: Apple music display ads, July 2019
                                                            • Nearly a third of consumers don’t take measures to avoid online ads
                                                              • Figure 44: Number of ad-avoidance methods used, May 2019
                                                              • Figure 45: Ad-avoidance methods, by number of ad-avoidance methods used, May 2019
                                                            • Voracious social media users look to avoid ads
                                                              • Figure 46: Social media sites visited daily, by number of ad-avoidance methods used, May 2019
                                                              • Figure 47: Attitudes toward digital advertising – Social media and local notifications, by number of ad-avoidance methods used, May 2019
                                                              • Figure 48: Digital ad results, by number of ad-avoidance methods used, May 2019
                                                            • Privacy concerns a factor behind ad-avoidance behaviors
                                                              • Figure 49: Attitudes toward digital advertising – Personal information, by number of ad-avoidance methods used, May 2019
                                                              • Figure 50: Online ad behaviors, by number of ad-avoidance methods used, May 2019
                                                              • Figure 51: Privacy on iPhone – Private Side, commercial, March 2019
                                                              • Figure 52: Privacy on iPhone – The Answer, March 2019
                                                          • Digital Ad Behaviors

                                                            • Consumers are aware advertisers are tracking them
                                                              • Figure 53: Digital ad behaviors, May 2019
                                                            • Video streaming services need variety in ads
                                                              • Figure 54: Digital ad behaviors – Repeating video ads, by generation, May 2019
                                                              • Figure 55: Digital ad behaviors – Repeated digital video ads, May 2019
                                                            • Inroads can be made with younger Millennials via social networks
                                                              • Figure 56: Digital ad behaviors, by generation, May 2019
                                                          • Consumer Attitudes toward Digital Privacy

                                                            • Consumers as a whole concerned with the information marketers have
                                                              • Figure 57: Consumer attitudes toward digital advertising – Personal information concern, by age, May 2019
                                                            • Younger women more comfortable when it comes to online personal information
                                                                • Figure 58: Attitudes toward privacy, part 1, by gender and age, October 2017-November 2018
                                                              • Privacy assurance and tangible benefits will get consumers to provide personal information
                                                                  • Figure 59: Attitudes toward privacy, part 2, by gender and age, October 2017-November 2018
                                                                • Generation Z men are most ambivalent when it comes to personal info
                                                                  • Figure 60: Attitudes toward privacy, part 3, by gender and age, October 2017-November 2018
                                                                  • Figure 61: Attitudes toward privacy, part 4, by gender and age, October 2017-November 2018
                                                              • Consumer Attitudes toward Digital Advertising

                                                                • Consumers skeptical of paid online advertising
                                                                  • Figure 62: Attitudes toward digital advertising, May 2019
                                                                • Ads in general are a nuisance to online consumers
                                                                    • Figure 63: Attitudes toward digital advertising, May 2019
                                                                  • Millennials most comfortable with video ads in the middle of content
                                                                    • Figure 64: Attitudes toward digital advertising – Video ad placement, by generation, May 2019
                                                                    • Figure 65: Attitudes toward digital advertising – Bothersome, by generations, May 2019
                                                                • Consumer Segmentation

                                                                  • Three consumer segments based on attitudes toward digital advertising
                                                                      • Figure 66: Consumer segmentation – Attitudes toward digital advertising, May 2019
                                                                    • Ad Neutralists
                                                                      • Characteristics
                                                                        • Figure 67: Profile of Ad Neutralists, May 2019
                                                                        • Figure 68: Attitudes toward digital advertising – Personal information concern, by consumer segmentation, May 2019
                                                                      • Opportunities
                                                                        • Figure 69: Breakdown of number of ad-avoidance methods used, by consumer segmentation, May 2019
                                                                        • Figure 70: Ad-avoidance methods, by consumer segmentation, May 2019
                                                                      • Ad Rejectors
                                                                        • Characteristics
                                                                            • Figure 71: Profile of Ad Rejectors, May 2019
                                                                            • Figure 72: Devices used to view digital ads – Smartphone, by consumer segmentation, May 2019
                                                                          • Opportunities
                                                                              • Figure 73: Digital ad behaviors – Ad clicking, by consumer segmentation, May 2019
                                                                            • Ad Realists
                                                                              • Characteristics
                                                                                  • Figure 74: Profile of Ad Realists, May 2019
                                                                                • Opportunities
                                                                                    • Figure 75: Attitudes toward digital advertising, by consumer segmentation, May 2019
                                                                                • Appendix – Data Sources and Abbreviations

                                                                                  • Data sources
                                                                                    • Sales data
                                                                                      • Fan chart forecast
                                                                                        • Consumer survey data
                                                                                          • Consumer behavioral data
                                                                                            • Direct marketing creative
                                                                                              • Abbreviations and terms
                                                                                                • Abbreviations
                                                                                                  • Terms
                                                                                                  • Appendix – The Market

                                                                                                      • Figure 76: Total US digital advertising spend – “Other” and fan chart forecast, at current prices, 2014-24
                                                                                                      • Figure 77: Total US digital advertising spend – “Other,” at current prices, 2014-24
                                                                                                      • Figure 78: Total US retail sales and forecast of 0, at inflation-adjusted prices, 2014-24
                                                                                                      • Figure 79: Total US retail sales and forecast of banner , at inflation-adjusted prices, 2014-24
                                                                                                      • Figure 80: Total US retail sales and forecast of video , at inflation-adjusted prices, 2014-24
                                                                                                      • Figure 81: Total US retail sales and forecast of search, at inflation-adjusted prices, 2014-24
                                                                                                      • Figure 82: Total US retail sales and forecast of other, at inflation-adjusted prices, 2014-24

                                                                                                  Digital Advertising - US - August 2019

                                                                                                  £3,435.47 (Excl.Tax)