April 18, 2011

Retail Continues to Lead in Online Ad Spending

Consumer packaged goods industry ups its share of online spend

Retail is the highest-spending industry online, according to eMarketer estimates that break down total US online ad spending by vertical. Retailers will spend $5.73 billion on internet advertising this year, up from $5.16 billion in 2010, accounting for more than one in every five online ad dollars.

Telecom, financial services and automotive round out the top four highest-spending industries this year.

Online ad spending by the retail industry will see double-digit growth of 11% for 2011, but other verticals will increase spending more quickly. Consumer packaged goods (CPG) spending will be increase 29% this year, automotive spending will rise by 14%, and healthcare and pharma will boost online spending by 13%.

eMarketer benchmarks its total US online ad spending as well as its industry-specific numbers against 2009 data from the Interactive Advertising Bureau/PricewaterhouseCoopers.

The high growth in CPG spending online will lead to a big change in share for that industry. In 2009, CPG online ad spending made up 6% of the total, but by 2015 that proportion will rise to 13%. The proliferation of online video—an ideal branding format for big consumer products advertisers—is a primary contributor to the growth.

Industries expected to lose share in online ad spending include telecom, financial services and travel, a mature online market in terms of online ad spending that will slip just slightly through 2015.

Healthcare and pharma spending will grow modestly but will likely be affected by the loss of patent protection for several blockbluster drugs and forthcoming guidelines from the US Food & Drug Administration, which many in the industry hope will provide clearer direction for how pharmaceutical products can be marketed online.

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