by Jack Loechner , Staff Writer @mp_research, February 15, 2018

The digital advertising industry shows few signs of slowing down, according to a paper by Brian Finnerty for MarinSoftware, presenting Industry Data and the Marin Advertising Index, representing billions of dollars of annual ad spend on the Marin platform. The report speaks to the top ten digital ad spend trends.

1. By the end of 2017, Google and Facebook owned 63% of the U.S. digital ad market and 54% of digital ad revenue worldwide, according to eMarketer. Nationally, Microsoft grew but remained a distant third place, claiming four percent of the total U.S. revenue share.

At the close of Q3 2017, Google reported ad revenues of $24B and Facebook reported $10B. All signs point to continued dominance of “the big two” in 2018.

2. Digital marketers increasingly understand that a “one size fits all” approach doesn’t cut it anymore. They’re finding ways to go even further to meet customer expectations of greater personalization and map relevant ad campaigns to audience needs. Layering “Audiences” on top of keywords drives better results than using keywords alone. Despite the advantage that combining audiences with keyword targeting provides, use of Audiences by advertisers remains low at just 21%.

3. Cisco expects video will represent 80% of all internet traffic by 2019. Not only that, but 64% of users are more likely to buy a product online after watching a video, according to comScore. YouTube has a secret weapon in the video battle: YouTubes’ TrueView has 93% ad viewability, and you only pay when a viewer watches 30 seconds of your ad.

As video advertising continues to explode, marketers who master the game stand to drive substantial campaign performance improvements. Useing YouTube and Facebook for your video ad campaigns takes advantage of 80%+ of the public’s attention in digital.

4. Despite the dominance of Google and Facebook, Amazon is emerging as the next big player in digital advertising, says the report, though Amazon’s current share of the digital ad market is just 2% nationally and less than 1% worldwide. However, the Wall Street Journal reported in December, GroupM’s parent agency, WPP, may increase its spending with Amazon by 50% this year from $200 million in 2017. This would help push total spending on Amazon ads, by three of the world’s largest agencies to a collective $800 million a year.

5. Voice search has taken the consumer market by storm and the numbers are staggering. Amazon has sold over 20 million Echo units, with Google Home gaining ground and taking up to 24% of market share since it hit the scene in 2015.

In addition to voice search, smart hubs and visual search will become firmly established in 2018. Innovative products like Google Lens, Pinterest Lens, and Amazon’s CamFind allow consumers to take a picture of an item and then search for that product to purchase online.

6. Because up to 90% of sales still happen in-store, marketers increasingly want to understand the full path to conversion and the impact of digital touch points to offline sales. Advertisers are increasingly embracing a holistic view of measurement, says the report.

7. Consumers continue to turn to mobile for all aspects of the shopping experience, whether it’s searching for products, finding the nearest retail location, or consulting their mobile device in-store. When it comes to mobile, shoppers are most often looking, and searching, to buy. It’s important to note that Google has access to 70% of all US debit and credit card transactions in-store through partnerships with companies that track that information.

8. Advertising is an industry in the crosshairs of consumer privacy, and the past several years have seen a substantial shift in attitudes towards protecting user identity and online activities. Many people are no longer content to share personally identifiable information (PII) without providing publishers with explicit permission and defining strict rules of engagement. Coupled with fresh legislation, many advertisers find themselves seeking practical advice on what marketing activities are permitted or prohibited.

9. Recent estimates from eMarketer predicted that over a quarter of US internet users would block ads in 2018, up from just under 16% in 2014. Also, research from PageFair shows that people are much more likely to leave your site if you ask them to disable ad blockers. Not only are ad blockers a reality on US desktop and mobile, but they’re also on the rise in developing countries. Ad blockers will continue to pose a significant threat to ad-funded business models due to their rising popularity with users globally.

10. Messenger Ads represent one of the most exciting channels to come online. Athough still a nascent offering, it’s being touted as “the new email” by some in the advertising industry. Messenger itself now has 1.3 billion monthly users, up from 1 billion in July 2016. That’s the same count as Facebook’s other chat product, WhatsApp, showing massive advertising potential. Advertisers are already reporting CTRs north of 50%. Perhaps it’ll decline with time, says the report, but Messenger Ads promise a huge opportunity for advertisers who jump on the bandwagon in 2018.

For additional information throughout the report, please visit here.

MediaPost.com: Search Marketing Daily