Ad Spending Trends in the Retail Sector

Maegan Buckler  | 

Brands in every sector now have more options than ever for advertising across all platforms, both in terms of buying methods and creative ad formats. What are retailers doing to engage and convert shoppers in an increasingly fragmented buying journey? We take a look at ad spending trends in retail with a focus on research from eMarketer. Here’s what to expect through 2017 and into next year:

Retailers dominate digital ad spend in the US
Retailers will spend more money on digital advertising than any other industry in 2017, thanks to fierce competition for online shoppers. US retailers will invest more than $18 billion on digital ads in 2017, accounting for more than 21% of all digital ad spending, which is a greater percentage than any other industry.

More shopping (and ads) are shifting to mobile
With an increasing number of consumers using phones and tablets to research and purchase products, mobile is becoming a key battleground for retailers courting shoppers. Spending on mobile ads by the retail sector will grow from more than $10 billion in 2016 to more than $12 billion in 2017, an increase of over 19%. The ability to reach shoppers with more personalized, targeted, and relevant offers is fueling this growth.

TV is a reliable favorite and video is on the upswing
Retailers have long relied on the power of sight, sound and motion to connect with consumers. As TV and video continue to evolve and converge, engaging shoppers on every screen and device is not only feasible, but essential. The retail industry will spend more than $7 billion on TV ads in 2017 and video spending is expected to exceed $2 billion this year, reflecting a growth rate of more than 24% over 2016.

Social is emerging as a key purchase and persuasion medium
More retail advertisers see value in social media ads to persuade shoppers. The growth of social “influencers,” who add sponsored brand content into their social media posts, is helping drive interest. In addition, a study by RIS News and Gartner found that 45% of retail executives plan to utilize social media as a major marketing strategy in the next 18 months.

Thanks to their high investment levels, retail marketers are poised to play a critical role in the continued evolution of digital advertising. The growth of ecommerce and online shopping are having a profound impact, leading to greater spending by the retail sector in both mobile and video. Wherever the dollars eventually get spent, expect to see more advertising innovation pioneered by this dynamic industry in the year ahead.

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