EMarketer: Mobile makes up 70% of retailers’ digital ad spend

Brief:

The retail sector's investment in mobile ads is expected to rise 23.6% this year to $16.33 billion from 2017, accounting for nearly 70% of retailers' digital ad spending, according to a new report from eMarketer shared with Mobile Marketer. That means the retail industry has a nearly 22% share of mobile ad spending in the U.S.
Overall, retailers will spend $23.5 billion on digital ads, up 18.7% over last year. The report noted that the retail industry will continue to lead digital ad business this year, representing 22% of all U.S. digital ad spending.
The auto industry is second behind retail in digital ad spends, with $13.57 billion in 2018, up 16.9% from last year. The automotive sector makes up 12.6% of U.S. mobile ad spending, or $9.42 billion. Across all industries and platforms, U.S. digital ad spending will rise 18.7% this year to $107.3 billion.

Insight:

The latest study reflects the growing dependence on mobile advertising to reach new consumers and sell products, no matter the industry. The numbers, however, aren't a surprise, as tech giants like Google and Facebook have continued to add features that help sectors like retail promote their inventory.

Google, which Statcounter says has a near-monopoly of 93% of the mobile search market, released "See What's In Store" this month, to help drive foot traffic to brick-and-mortar stores. The feature lets retailers show a list of their inventory for free in a Knowledge Panel that appears in the right-hand column of search results for a business and on Google Maps.

Facebook, which along with Google controls the lion's share of the digital ad market, also seeks to sell more ads to small businesses. The social network in March added store sales optimization features to its offline solutions, letting retailers use machine learning to target consumers who are the most likely to make purchases in their stores, Adweek reported. Luxury fashion brand Michael Kors tested the service with a video ad campaign on Facebook-owned Instagram, and saw an 11% gain in incremental in-store sales compared with people in a test group who weren't shown ads that used the optimization feature.

As for digital display advertising, Amazon has grown its ad business into a "multi-billion dollar" program, drawing marketers who are likely attracted by the company's wealth of data on its customers' interests and buying habits. The e-commerce giant in May began testing a new ad display offering that lets sellers in its online marketplace purchase spots that follow shoppers through their sessions across the web and try to lure them back to Amazon to complete a purchase.