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Mobile, Video, and Native: The Biggest Drivers of Digital Ad Spend

Despite problems such as ad fraud and ad blocking plaguing the medium, global ad spend on digital channels is set to reach $223.74 billion by the end of 2017 according to a report by eMarketer, with double-digit growth predicted through 2020.

That’s the big picture, but digital is an all-encompassing term, in this report, we review how mobile, video, and native are leading that growth.

Table of Contents:

> Mobile

No surprises here, ad spend on mobile as a channel is growing at an unprecedented rate, which makes sense because that’s where most of us spend a majority of our time now, a point driven home by this chart on global internet consumption by device.

Global internet consumption by device. Image courtesy: Digiday

More on mobile ad spend from the eMarketer report:

This year, mobile will account for 63.3% of digital and 24.3% of total media ad spending. By 2021, it will grow to a 77.1% share of digital and 37.1% of total media ad investments.

A report from ZenithOptimedia has a similar forecast:

In 2018 we expect mobile advertising to account for 60% of all internet advertising. That year mobile advertising expenditure will total US$134bn, which is more than will be spent on newspaper, magazine, cinema and outdoor advertising put together.

Takeaway for publishers: Implement a mobile-specific ad strategy taking into account ad sizes and formats that work best with the medium. Also consider packaging your mobile ad inventory separately since advertisers are willing to pay more for well-defined audience segments.

> Video

The easier availability and cost-effectiveness of faster internet connections and less intrusive ad formats are finally making video ads hit the mainstream.

Users are also spending more time consuming video content, according to YouGov data, between Sept 2014 to Sept 2017, the average time users spent viewing short videos online went up from 51 minutes to 2 hrs 21 minutes per week.

A new report by IAB UK reveals that ad spend on video ads has now surpassed that on banner ads.

Advertisers spent more on video ads than banner ads for the first time ever. Image courtesy: IAB UK / PwC

The IAB’s CEO Jon Mew said:

The time people spend watching online video has grown tremendously over the last few years, so it’s little wonder that video is now the fastest-growing ad format as advertisers look to tap into the changing way people consume content.

Takeaway for publishers: Integrate video into your ad strategy if you haven’t yet, if your network or exchange supports video, start experimenting with a basic video ad format to see how it works, but avoid formats that are known for being intrusive such as autoplaying or pop-up ads.

> Native

Compared to banner ads which have been around since over two decades, native ad networks are still the cool new kid on the block. But native ads including content recommendations, sponsored content, and influencer marketing have witnessed a growth of 600% between 2014 and 2016.

Native ads are projected to drive 74% of all digital ad revenue by 2021. Image courtesy: Business Insider

One of the biggest selling points of native ads is that unlike banner ads, many native ad formats are largely immune to ad blockers either by design or by network partnerships with ad blockers. Other than that, they also don’t adversely affect the user experience compared to other ad formats. Lauren Fisher, principal analyst at eMarketer, says:

Growth of native digital display is being driven by publishers’ pursuit of higher-value and more mobile-friendly inventory, as well as by advertisers’ demands for more engaging, less intrusive ads.

Takeaway for publishers: Native ads come in many different shapes and forms, including native display units served by niche ad networks, content recommendations, and sponsored posts. Start monetising your website with these formats to create an additional channel of revenue.

*Statistics gathered from media consumption and ad spend reports from eMarketer, ZenithOptimedia, Statista, YouGov, and IAB