U.S. Display Ad Spending to Overtake Search in 2016, Suggesting TV Budgets in Motion

Brands Will Spend More on Banners Than Video Ads for Foreseeable Future

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Search advertising will be fine, according to eMarketer's new forecast, but the growth in display ad spending is indicative of shifts in brand strategy.
Search advertising will be fine, according to eMarketer's new forecast, but the growth in display ad spending is indicative of shifts in brand strategy. Credit: Chris Ratcliffe/Bloomberg

For years marketers have put more of their digital budgets into search engines' coffers than publishers', but that won't be the case this year or any year to follow, according to the latest estimates from eMarketer.

This year for the first time, U.S. advertisers will spend more money on display ads, here defined as including traditional banners, native ads and video, than they will on search ads, according to eMarketer. That sea change would be further evidence that TV-loving brand advertisers are bringing their budgets online. Display ads are considered more accommodating to TV-style brand awareness campaigns than search ads, which are typically employed for direct-response efforts such as driving interested consumers directly to brand sites to buy.

But search advertising isn't expected to suffer. While display ad spending is projected to grow 23% in 2016, search ad spending is projected to grow 10%. U.S. advertisers are expected to put more and more money into both display and search ads each year for the next few years, according to eMarketer.

While pricey pre-roll video ads are thought to be the logical benefactor if TV budgets shift online, traditional banners and native ads, which mimic editorial content and appear in content feeds on publishers' sites as well as on services like Facebook and Twitter, will continue to bring in more money through 2019, according to eMarketer. U.S. advertisers are expected to spend their remaining digital display dollars on sponsorships and rich media ads, like those autoplaying in-banner video spots that appear within a text article; eMarketer only categorizes the pre-roll and mid-roll video ads that actually run within a video player as a video ad.

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