e marketer us_ad_spending-q3_2013_forecast_and_comparative_estimates

US AD SPENDINGQ3 2013 Forecast and Comparative Estimates

OCTOBER 2013

Alison McCarthy

Contributors: Andres Leal, Monica Peart, Martín Utreras, Jeffrey Vasapolli, Haixia Wang

Read this on eMarketer for iPad

https://itunes.apple.com/us/app/emarketer/id611556300



US AD SPENDING: Q3 2013 FORECAST AND COMPARATIVE ESTIMATES ©2013 EMARKETER INC. ALL RIGHTS RESERVED 2

CONTENTS2 Executive Summary

3 Total Media Ad Spending

5 Digital Ad Spending

11 Mobile Ad Spending

15 Social Network Ad Revenues

16 Related eMarketer Articles

16 Editorial and Production Contributors

EXECUTIVE SUMMARY

Total spending on US paid media will reach

$171.01 billion in 2013. eMarketer expects total media

ad expenditure to rise 3.6% this year and maintain

annual growth between 3.1% and 4.1% through 2017.

Though TV will continue to lead the US ad market

in dollars spent, nearly all traditional ad formats will

see flat growth or declines in outlays throughout the

forecast period.

Spending on digital advertising, which includes all formats served to desktop, laptop and mobile devices, will total $42.26 billion this year, or nearly one-quarter of all ad dollars. This is up 14.9% since 2012, with double-digit gains expected through 2015. The growth of digital ad investments will be largely attributed to dramatic increases in expenditure on mobile.

eMarketer has increased our projections for total media and digital ad spending slightly since our June 2013 forecast due to higher-than-expected outlays on mobile formats. Mobile ad investments are set to rise 95.0% this year—almost 20 percentage points higher than what we previously estimated. By 2017, digital will grab nearly one in three dollars spent on advertising in the US, while mobile will capture 15.8% of the market.

KEY QUESTIONS ■ What is the outlook for total media ad spending in

the US between this year and 2017?

■ How much will marketers spend on digital and

mobile advertising between 2013 and 2017? Which

formats will grow the fastest?

■ How will revenues from major digital and mobile ad

publishers increase through 2017?

■ What is the forecast for US social network

ad revenues?

billions and % changeUS Total Media Ad Spending, 2011-2017

2011

$158.26

2.9%

2012

$165.03

4.3%

2013

$171.01

3.6%

2014

$177.76

3.9%

2015

$183.35

3.1%

2016

$190.86

4.1%

2017

$196.95

3.2%

Total media ad spending % change

Note: includes digital (online and mobile), directories, magazines,newspapers, outdoor, radio and TVSource: eMarketer, Aug 2013161678 www.eMarketer.com


TOTAL MEDIA AD SPENDING

US advertisers will spend $171.01 billion on paid

media this year, up 3.6%, or nearly $6 billion, from

total investments in 2012. Growth of total media ad

expenditure is slightly down from last year’s uptick

of 4.3%, which was boosted by the national election

cycle and Summer Olympics. eMarketer expects

the FIFA World Cup, Winter Olympics and midterm

elections to lead to another bump in growth in 2014.

In June 2013, eMarketer forecast that investments in paid media by US advertisers would rise 3.4% in 2013 to total $170.69 billion. The upward adjustment in projected spending is largely attributed to higher-than-expected outlays in mobile ad formats this year.

billions and % changeUS Total Media Ad Spending, 2011-2017

2011

$158.26

2.9%

2012

$165.03

4.3%

2013

$171.01

3.6%

2014

$177.76

3.9%

2015

$183.35

3.1%

2016

$190.86

4.1%

2017

$196.95

3.2%

Total media ad spending % change

Note: includes digital (online and mobile), directories, magazines,newspapers, outdoor, radio and TVSource: eMarketer, Aug 2013161678 www.eMarketer.com

TV will remain the No.1 recipient of ad investments throughout the forecast period. Between 2013 and 2017, spending on this medium will rise from $66.4 billion to $75.3 billion, though its share of total expenditure will dip from 38.8% to 38.2% during that time period.

Beginning this year, television ad dollars will rise more slowly than total media ad spending (with the exception of 2016). Digital media ad expenditures, which will make up nearly one-quarter of total media ad allocations this year and are set to reach close to one-third by 2017, will have the largest jump in share throughout the forecast period. In fact, digital, which includes mobile formats, will be the only advertising format to gain share in the foreseeable future.

The increase in mobile ad spending plays a principal role in digital’s growth as US advertisers continue to rapidly invest dollars into mobile search and display. Between 2013 and 2017, total investment in mobile will rise from $8.5 billion, or 5.0% of all paid media ad expenditures, to $31.1 billion, 15.8% of the total. By the end of eMarketer’s forecast period, this medium will claim more than half of spending on digital ads.

billionsUS Total Media Ad Spending, by Media, 2011-2017

TV

Digital

—Mobile

Print

—Newspapers*

—Magazines*

Radio**

Outdoor

Directories*

Total

2011

$60.7

$32.0

$1.6

$35.8

$20.7

$15.2

$15.2

$6.4

$8.2

$158.3

2012

$64.5

$36.8

$4.4

$34.1

$18.9

$15.2

$15.4

$6.7

$7.5

$165.0

2013

$66.4

$42.3

$8.5

$32.9

$17.8

$15.1

$15.6

$7.0

$6.9

$171.0

2014

$68.5

$47.6

$13.1

$32.2

$17.1

$15.1

$15.9

$7.2

$6.4

$177.8

2015

$70.0

$52.5

$18.6

$31.6

$16.6

$15.1

$16.0

$7.4

$5.9

$183.4

2016

$73.1

$57.3

$24.7

$31.3

$16.2

$15.1

$16.0

$7.6

$5.5

$190.9

2017

$75.3

$61.4

$31.1

$31.2

$16.1

$15.2

$16.1

$7.8

$5.3

$197.0

Note: eMarketer benchmarks its US newspaper ad spending projectionsagainst the NAA, for which the last full year measured was 2012, and its USoutdoor ad spending projections against the OAAA, for which the last fullyear measured was 2011; numbers may not add up to total due torounding; *print only; **excludes off-air radio & digitalSource: eMarketer, Aug 2013161679 www.eMarketer.com

% of total

US Total Media Ad Spending Share, by Media,2011-2017

2011 2012 2013 2014 2015 2016 2017

TV 38.3% 39.1% 38.8% 38.6% 38.1% 38.3% 38.2%

Digital 20.2% 22.3% 24.7% 26.8% 28.6% 30.0% 31.1%

—Mobile 1.0% 2.6% 5.0% 7.4% 10.1% 12.9% 15.8%

Print 22.6% 20.7% 19.2% 18.1% 17.2% 16.4% 15.9%

—Newspapers* 13.1% 11.5% 10.4% 9.6% 9.0% 8.5% 8.2%

—Magazines* 9.6% 9.2% 8.8% 8.5% 8.2% 7.9% 7.7%

Radio** 9.6% 9.3% 9.1% 8.9% 8.7% 8.4% 8.1%

Outdoor 4.0% 4.0% 4.1% 4.1% 4.1% 4.0% 3.9%

Directories* 5.2% 4.5% 4.0% 3.6% 3.2% 2.9% 2.7%

Note: eMarketer benchmarks its US newspaper ad spending projectionsagainst the NAA, for which the last full year measured was 2012, and its USoutdoor ad spending projections against the OAAA, for which the last fullyear measured was 2011; numbers may not add up to 100% due torounding; *print only; **excludes off-air radio & digitalSource: eMarketer, Aug 2013161682 www.eMarketer.com


Investments in digital advertising will rise the fastest of all ad media, driven by mobile’s increasing prominence in the market. This year, digital ad spending will grow 14.9%, while dollars spent specifically on mobile will increase 95.0%—nearly 20 percentage points higher than eMarketer’s previous forecast of 75.3%.

This year, outdoor and TV ad spending in the US will rise at rates just above and below the average growth of investments in paid media, at 4.2% and 2.8%, respectively. Over-the-air radio ad expenditures will rise slightly more slowly, at 1.5%.

Investments in print magazine advertising will be relatively flat through 2017, while we expect print newspaper ad spending to decline for the entirety of the forecast period. Following a decrease of 8.4% in 2012, the latter will drop 6.1% this year. Expenditure on directories will also continue on a downward trajectory, falling 7.8% this year.

% change

US Total Media Ad Spending Growth, by Media,2011-2017

Digital

—Mobile

Outdoor

TV

Radio*

Print

—Magazines**

—Newspapers**

Directories**

Total

2011

21.7%

103.7%

4.0%

2.8%

-0.6%

-5.7%

-0.5%

-9.2%

-9.0%

2.9%

2012

15.0%

178.3%

4.4%

6.4%

1.3%

-4.8%

0.3%

-8.4%

-8.5%

4.3%

2013

14.9%

95.0%

4.2%

2.8%

1.5%

-3.6%

-0.4%

-6.1%

-7.8%

3.6%

2014

12.6%

53.8%

3.6%

3.3%

1.7%

-2.3%

-0.3%

-4.0%

-7.5%

3.9%

2015

10.3%

41.8%

3.0%

2.0%

0.5%

-1.7%

-0.2%

-3.0%

-7.0%

3.1%

2016

9.2%

33.1%

2.6%

4.5%

0.3%

-0.9%

0.3%

-2.0%

-6.8%

4.1%

2017

7.1%

26.0%

2.0%

3.0%

0.2%

-0.3%

0.4%

-1.0%

-4.0%

3.2%

Note: eMarketer benchmarks its US newspaper ad spending projectionsagainst the NAA, for which the last full year measured was 2012, and its USoutdoor ad spending projections against the OAAA, for which the last fullyear measured was 2011; *excludes off-air radio & digital; **print onlySource: eMarketer, Aug 2013161683 www.eMarketer.com

Ten of the 14 research firms estimating US total media ad spending for 2013 expect outlays to fall between $166.9 billion and $185.4 billion. eMarketer’s projection is more conservative compared with most other sources. Higher projections from Winterberry Group and Jefferies include expenditures on direct mail, which is not a part of our forecast.

billions

Comparative Estimates: US Total Media Ad Spending,2012-2017

Winterberry Group,Feb 2013

Jefferies, Sep 2012

Citi Research, June 2012

RBC Capital Markets, April 2013

Barclays Capital, March 2013

JMP Securities,March 2013

Cantor Fitzgerald,Sep 2012

Deutsche Bank,April 2013

Pivotal Research Group, May 2013

J.P. Morgan, Jan 2013

eMarketer, Aug 2013

ZenithOptimedia,June 2013

GroupM, Aug 2013

MAGNA GLOBAL,June 2013

Strategy Analytics,June 2013

VSS, Sep 2012

Kantar Media,March 2013

-

2012

$259.5

$195.8

$178.2

$178.6

$179.2

$180.4

$177.0

$176.3

$177.1

$176.9

$165.0

$161.2

$153.5

$128.0

$200.8

$140.0

2013

$267.6

$202.2

$185.4

$184.0

$182.7

$181.3

$177.1

$176.4

$176.2

$176.2

$171.0

$166.9

$156.3

$155.0

-

-

-

2014

-

$209.3

-

$189.5

-

$184.9

$183.6

$182.2

$184.6

$182.8

$177.8

$174.4

$160.8

$164.1

-

-

-

2015

-

$216.8

-

-

-

$187.7

$186.1

$183.1

$186.7

$184.5

$183.4

$182.4

-

-

-

-

-

2016

-

-

-

-

-

$190.5

$195.1

-

$196.7

$194.4

$190.9

-

-

-

-

$255.2

-

2017

-

-

-

-

-

$193.4

$198.2

-

$199.3

-

$197.0

-

-

-

-

-

-

Source: eMarketer, Aug 2013; various, as noted, 2012 & 2013163646 www.eMarketer.com


There is a broad range of estimates for gains in US total media ad spending this year. Ten of the 16 research firms providing predictions for growth in total media ad outlays expect ad dollars to increase between 1.8% and 4.0%, while the remaining six sources predict flat gains or declines. eMarketer has the second-highest projection for 2013, following Citi Research. All sources providing forecasts for 2014 expect growth to be between 2.9% and 4.7%.

% change

Comparative Estimates: US Total Media Ad SpendingGrowth, 2012-2017


eMarketer, Aug 2013

Carat, March 2013

ZenithOptimedia, June 2013

Jefferies, Sep 2012

Winterberry Group, Feb 2013



GroupM, Aug 2013

Warc Consensus, June 2013

JMP Securities, March 2013

Cantor Fitzgerald, Sep 2012

Deutsche Bank, April 2013



MAGNA GLOBAL, May 2013

Nielsen, April 2013

Strategy Analytics, June 2013

Kantar Media, March 2013

2012

3.0%

4.3%

4.0%

4.6%

2.0%

3.2%

4.0%

4.0%

3.4%

-

4.0%

2.7%

2.0%

2.7%

2.9%

-

4.8%

3.0%

3.0%

2013

4.0%

3.6%

3.5%

3.5%

3.3%

3.1%

3.0%

1.9%

1.8%

1.8%

0.5%

0.0%

0.0%

-0.4%

-0.5%

-0.7%

-

-

-

2014

-

3.9%

4.0%

4.5%

3.5%

-

3.0%

-

2.9%

-

3.0%

3.7%

4.0%

3.7%

4.7%

4.3%

-

-

-

2015

-

3.1%

-

4.6%

3.6%

-

-

-

-

-

2.0%

1.4%

0.6%

1.0%

1.1%

-

-

-

-

2016

-

4.1%

-

-

-

-

-

-

-

-

1.5%

4.9%

-

5.4%

5.4%

-

-

-

-

2017

-

3.2%

-

-

-

-

-

-

-

-

1.5%

1.6%

-

-

1.3%

-

-

-

-


DIGITAL AD SPENDING

Digital ad spending remains on a steady growth

trajectory, boosted in particular by the significant

rise in mobile ad dollars. eMarketer forecasts that

US digital ad expenditures will hit $42.26 billion in

2013, up from $36.80 billion in 2012. Nearly

one-quarter of total media ad outlays will go toward

digital formats appearing on desktop and laptop

computers as well as mobile phones, tablets and

other connected devices.

This year, digital ad spending is set to rise 14.9%, following growth of 15.0% in 2012. We expect investments to slow throughout the forecast period, though gains will remain strong. By 2017, expenditure will reach $61.35 billion and account for nearly one-third of the total media ad market.

billions, % change and % of total media ad spendingUS Digital Ad Spending, 2011-2017

2011

$31.99

21.7%

20.2%

2012

$36.80

15.0%

22.3%

2013

$42.26

14.9%

24.7%

2014

$47.58

12.6%

26.8%

2015

$52.49

10.3%

28.6%

2016

$57.30

9.2%

30.0%

2017

$61.35

7.1%

31.1%

Digital ad spending % change % of total media ad spending

Note: includes advertising that appears on desktop and laptop computersas well as mobile phones and tablets, and includes all the various formatsof advertising on those platforms; data through 2012 is derived fromIAB/PwC dataSource: eMarketer, Aug 2013161703 www.eMarketer.com

eMarketer has revised our latest estimate for 2013 digital ad spending slightly upward since our June 2013 projections. Previously, we forecast that investments would grow 14.0% to total $41.94 billion. This increase is primarily due to the upward revision of mobile ad spending in 2013, which we have adjusted from our previous estimate of $7.65 billion to $8.51 billion.


Mobile ad spending will account for 20.1% of digital media ad expenditure this year, while outlay on desktop advertisements will make up the remaining portion to total $33.75 billion. This figure is $540 million lower than eMarketer’s previous estimate for desktop, and we have decreased it primarily due to the faster-than-expected migration of ad dollars from desktop to mobile.

Despite desktop’s current dominance, advertisers are rapidly turning to mobile to reach the growing smartphone, tablet and mobile internet audiences. Desktop ad expenditure is expected to peak next year at $34.50 billion and then begin a downward trajectory for the duration of the forecast period. By 2017, spending on mobile will surpass desktop investments, which will be just lower than 2011 levels.

billionsUS Digital Ad Spending, by Channel, 2011-2017

2011

$30.42$1.57

2012

$32.43$4.36

2013

$33.75$8.51

2014

$34.50$13.09

2015

$33.93$18.56

2016

$32.60$24.70

2017

$30.22

$31.13

Desktop* Mobile**

Note: *includes spending primarily on desktop-based ads; **includesdisplay (banners and other, rich media and video), search andmessaging-based advertisingSource: eMarketer, Aug 2013162593 www.eMarketer.com

With the exception of sponsorships and digital video, ad investments on almost all desktop formats will remain flat or decline in 2013 and 2014. Comparatively, nearly all mobile search formats will post triple-digit or high double-digit growth this year.

There is significant variation in expectations for US digital ad spending in 2013. Firms forecast that investments will fall between $25.8 billion and $47.3 billion, though the majority of these projections predict spending to be at least $40.3 billion.

billions

Comparative Estimates: US Digital Ad Spending,2012-2017

Winterberry Group, Jan 2013

Jefferies, Aug 2013

Cowen and Company, Nov 2012





eMarketer, Aug 2013

PwC, June 2013

Barclays Capital, May 2013

MAGNA GLOBAL, Jan 2013






GroupM, Aug 2013

IAB, April 2013

Digital TV Research Limited, Nov 2012

2012

$39.7

$36.6

$37.6

$37.0

$37.2

$37.2

$27.0

$36.8

$36.6

$36.6

$36.3

$35.7

$35.7

$34.2

$30.7

-

$23.6

$36.6

-

2013

$47.3

$44.4

$43.7

$43.5

$43.4

$42.5

$42.5

$42.3

$42.0

$41.6

$41.5

$41.3

$40.3

$37.8

$36.3

$35.0

$25.8

-

-

2014

-

$52.7

$49.9

$51.1

$50.3

-

$48.0

$47.6

$47.9

$46.8

-

$46.5

$44.7

$41.7

$43.0

-

$28.3

-

-

2015

-

$60.5

$55.9

$59.4

$57.4

-

-

$52.5

$54.3

$51.6

-

$51.5

$49.1

$45.6

$50.9

-

-

-

-

2016

-

$69.2

$61.5

$68.3

$65.0

-

-

$57.3

$61.5

$55.6

-

$56.6

$53.5

-

-

-

-

-

-

2017

-

-

$66.8

-

$72.5

-

-

$61.3

$69.4

$59.2

-

$61.9

$57.8

-

-

-

-

-

$58.1


There’s an even wider disparity in projections for 2013 digital ad spending growth. GroupM forecast an increase of 9.5% this year, while Jefferies predicted that expenditure would rise 21.4%. eMarketer’s estimate is in the midrange, at 14.9%.

% change

Comparative Estimates: US Digital Ad Spending Growth, 2012-2017

Jefferies, Aug 2013







eMarketer, Aug 2013

PwC, June 2013





MAGNA GLOBAL, May 2013


GroupM, Aug 2013

SMI, March 2013

IAB, April 2013

2012

15.2%

14.7%

18.2%

16.6%

17.3%

18.4%

16.0%

15.0%

15.2%

17.0%

-

15.2%

15.2%

-

13.2%

10.0%

15.5%

15.0%

2013

21.4%

19.1%

18.2%

17.4%

16.6%

16.2%

15.0%

14.9%

14.8%

14.0%

14.0%

13.8%

13.0%

11.5%

10.6%

9.5%

-

-

2014

18.8%

-

18.4%

17.5%

15.8%

14.3%

13.0%

12.6%

14.2%

-

-

12.5%

11.0%

12.0%

10.2%

9.5%

-

-

2015

14.7%

-

18.5%

16.3%

14.3%

12.0%

-

10.3%

13.4%

-

-

10.3%

10.0%

-

9.3%

-

-

-

2016

14.4%

-

-

14.9%

13.1%

10.1%

-

9.2%

13.3%

-

-

7.8%

9.0%

-

-

-

-

-

2017

-

-

-

-

11.6%

8.5%

-

7.1%

12.9%

-

-

6.5%

8.0%

-

-

-

-

-



Forecasts for the portion of total media ad spending that will go toward digital in 2013 are more aligned. eMarketer and J.P. Morgan both expect digital to take in nearly one in four paid media ad dollars this year, while other sources project digital’s share to be between 21.6% and 23.0%. GroupM’s estimate is more conservative, at 16.5%. Cantor Fitzgerald and eMarketer predict digital’s portion will reach 27.0% and 30.0% in 2016, respectively, while J.P. Morgan expects more aggressive growth in share.

% of total media ad spending

Comparative Estimates: US Digital Ad Spending Share,2012-2017

eMarketer, Aug 2013 (1)

J.P. Morgan, Jan 2013 (2)



Jefferies, Sep 2012 (3)

Deutsche Bank, April 2013 (4)

GroupM, Aug 2013 (5)

2012

22.3%

20.9%

21.0%

20.0%

19.1%

19.5%

15.4%

2013

24.7%

24.7%

23.0%

23.0%

21.8%

21.6%

16.5%

2014

26.8%

28.0%

25.0%

24.0%

23.8%

22.9%

17.6%

2015

28.6%

32.2%

-

26.0%

25.1%

24.9%

-

2016

30.0%

35.1%

-

27.0%

-

-

-

2017

31.1%

-

-

29.0%

-

-

-

Note: (1) includes advertising that appears on desktop and laptopcomputers as well as mobile phones and tablets, and includes all thevarious formats of advertising on those platforms; data through 2012 isderived from IAB/PwC data; (2) includes banner ads, classifieds/auctions,digital video, lead generation/email, mobile, rich media, search andsponsorships; (3) includes banner ads, classifieds/auctions, email,referrals/lead generation, mobile, rich media, search, sponsorships andvideo; (4) includes political, Olympics and mobile; (5) includes search andother; excludes classifieds and agency commissions; figures are beforediscounts from rate cardSource: eMarketer, Aug 2013; various, as noted, 2012 & 2013164311 www.eMarketer.com

DIGITAL AD SPENDING, BY FORMAT Search remains the leading digital ad format, with $19.6 billion in spending this year—but its dominance is quickly waning, even as the mobile search market strengthens. Beginning in 2015, advertisers will spend more on display, which includes banners, video, rich media, sponsorships and other display formats. Mobile rich media, sponsorships and video advertisements will particularly help fuel the growth of display ad investments.

eMarketer forecasts that between 2013 and 2017, display advertising will rise from $17.6 billion to $30.0 billion—or nearly half of all US digital ad spending. This year, more than one in five digital ad dollars will go toward banners and other formats, such as Facebook’s Sponsored Stories and Twitter’s Promoted Tweets. Video ad spending will account for nearly 10% of all digital ad expenditures, while rich media and sponsorships will each represent just below 5% of the total.

billionsUS Digital Ad Spending, by Format, 2011-2017

Search

Display

—Banners and other*

—Video

—Rich media

—Sponsorships

Classifieds and directories

Lead generation

Mobile messaging

Email

Total

2011

$15.1

$12.3

$7.6

$2.0

$1.7

$1.1

$2.6

$1.5

$0.3

$0.2

$32.0

2012

$17.3

$14.8

$8.6

$2.9

$1.8

$1.5

$2.6

$1.7

$0.2

$0.2

$36.8

2013

$19.6

$17.6

$9.5

$4.1

$2.1

$1.9

$2.7

$1.9

$0.2

$0.2

$42.3

2014

$21.6

$20.6

$10.2

$5.7

$2.4

$2.3

$2.8

$2.1

$0.2

$0.2

$47.6

2015

$23.2

$23.8

$10.8

$7.0

$3.4

$2.6

$2.9

$2.2

$0.2

$0.2

$52.5

2016

$24.8

$26.9

$11.4

$8.2

$4.4

$2.9

$3.0

$2.2

$0.2

$0.3

$57.3

2017

$25.6

$30.0

$12.2

$9.2

$5.4

$3.1

$3.1

$2.3

$0.2

$0.3

$61.4

Note: includes advertising that appears on desktop and laptop computersas well as mobile phones and tablets on all formats mentioned; datathrough 2012 is derived from IAB/PwC data; numbers may not add up tototal due to rounding; *includes ads such as Facebook's Sponsored Storiesand Twitter's Promoted TweetsSource: eMarketer, Aug 2013161706 www.eMarketer.com

% of total and billionsUS Digital Ad Spending Share, by Format, 2011-2017

2011 2012 2013 2014 2015 2016 2017

Search 47.2% 47.1% 46.5% 45.4% 44.3% 43.2% 41.7%

Display 38.5% 40.2% 41.6% 43.3% 45.3% 46.9% 48.8%

—Banners andother*

23.6% 23.3% 22.6% 21.5% 20.6% 20.0% 20.0%

—Video 6.3% 7.9% 9.7% 12.0% 13.3% 14.2% 15.0%

—Rich media 5.2% 4.9% 4.8% 5.1% 6.5% 7.6% 8.8%

—Sponsorships 3.5% 4.2% 4.5% 4.8% 4.9% 5.1% 5.1%

Classifieds anddirectories

8.1% 7.0% 6.4% 5.9% 5.5% 5.2% 5.0%

Leadgeneration

4.8% 4.6% 4.5% 4.4% 4.1% 3.9% 3.8%

Mobilemessaging

0.8% 0.6% 0.6% 0.5% 0.4% 0.4% 0.3%

Email 0.7% 0.6% 0.5% 0.5% 0.5% 0.4% 0.4%

Total $31.99 $36.80 $42.26 $47.58 $52.49 $57.30 $61.35

Note: includes advertising that appears on desktop and laptop computersas well as mobile phones and tablets on all formats mentioned; datathrough 2012 is derived from IAB/PwC data; numbers may not add up to100% due to rounding; *includes ads such as Facebook's SponsoredStories and Twitter's Promoted TweetsSource: eMarketer, Aug 2013161710 www.eMarketer.com

Digital display ad spending, which is forecast to rise 19.0% in 2013, will be the only format to grow at an above-average rate this year. At 13.2%, the rate of increase for search will be just slightly below average, though still strong, with investments in mobile search strongly driving this. The more traditional digital ad formats of email and classifieds and directories will post significantly slower gains.


Spending on video will be less than half the amount advertisers allocate toward banners and other display formats, but video will continue to be the fastest-growing format through 2014. The medium’s small base will help boost gains, as will high US digital video viewer penetration; YouTube’s already large viewership; and the integration of video to social media via Vine, Instagram and possibly Facebook in the near future. eMarketer expects three out of four US internet users to watch digital video at least once per month this year.

% changeUS Digital Ad Spending Growth, by Format, 2011-2017

2011 2012 2013 2014 2015 2016 2017

Display 24.4% 19.9% 19.0% 17.3% 15.3% 12.9% 11.5%

—Video 40.8% 44.5% 42.4% 39.1% 21.6% 17.1% 13.0%

—Sponsorships 56.1% 37.0% 23.0% 20.2% 13.5% 12.6% 7.8%

—Rich media 7.3% 8.6% 14.1% 17.9% 41.7% 27.9% 23.2%

—Banners andother*

21.3% 13.3% 11.4% 7.2% 5.9% 5.7% 7.0%

Search 25.8% 14.8% 13.2% 10.1% 7.4% 6.6% 3.3%

Leadgeneration

13.7% 10.5% 12.3% 10.2% 4.0% 3.1% 3.1%

Mobilemessaging

-1.1% -11.0% 7.4% -7.0% -5.3% -1.0% -4.3%

Email 9.2% 3.0% 5.3% 2.4% 2.4% 4.3% 2.7%

Classifieds anddirectories

-0.7% -0.8% 5.0% 3.9% 2.7% 4.1% 2.4%

Total 21.7% 15.0% 14.9% 12.6% 10.3% 9.2% 7.1%

Note: includes advertising that appears on desktop and laptop computersas well as mobile phones and tablets on all formats mentioned; datathrough 2012 is derived from IAB/PwC data; *includes ads such asFacebook's Sponsored Stories and Twitter's Promoted TweetsSource: eMarketer, Aug 2013161711 www.eMarketer.com

eMarketer’s estimate for US display ad spending is one of the highest, second only to Jefferies’ between 2013 and 2015. Sources project display ad dollars to range from $5.7 billion to $23.9 billion this year. Growth forecasts for 2013 also have a large spread, spanning from 6.0% to 22.3%. eMarketer is on the high end, with an estimate of 19.0%.

Comparative Estimates: US Display Ad Spending,2012-2017

Display ad spending (billions)

Jefferies, Aug 2013 (1)


IDC, Oct 2012

Winterberry Group, Jan 2013 (3)

Forrester Research, Oct 2012 (4)


Citi Research, June 2012 (6)

JMP Securities, March 2013 (6)

Barclays Capital, May 2013 (7)


Cowen and Company, Nov 2012 (8)

PwC, June 2013 (9)

Pivotal Research Group, May 2013 (10)


IAB, April 2013 (11)

Display ad spending growth (% change)

Jefferies, Aug 2013 (1)

IDC, Oct 2012


Forrester Research, Oct 2012 (4)

Winterberry Group,Jan 2013 (3)

Cowen and Company, Nov 2012 (8)


Citi Research, June 2012 (6)



JMP Securities, March 2013 (6)


Pivotal Research Group, Jan 2013 (10)

Strategy Analytics, June 2013 (12)

IAB, April 2013 (11)

SMI, March 2013

Kantar Media, March 2013

2012

$19.6

$14.8

$13.9

$13.7

$12.7

$12.5

$12.3

$12.2

$12.0

$11.9

$10.7

$11.5

$9.0

$5.2

$12.0

-

27.9%

19.9%15.2%

14.7%

16.4%

11.5%

11.0%

8.0%

10.0%

10.0%

8.0%

0.3%

-

8.6%

4.0%

-3.0%

2013

$23.9

$17.6

$17.1

$16.2

$15.1

$13.7

$13.6

$13.2

$13.0

$13.0

$12.2

$12.1

$10.0

$5.7

-

22.2%

22.3%

19.0%18.4%

18.4%

14.0%

10.5%

10.0%

10.0%

9.5%

9.0%

8.0%

6.7%

6.0%

-

-

-

19.9%

17.3%

17.3%18.0%

11.0%

10.0%

9.0%

9.5%

8.0%

8.0%

7.0%

2014

$28.7

$20.6

$20.0

-

$17.8

$14.9

-

$14.3

$14.0

$14.2

$13.5

$13.2

$10.9

$6.3

-

-

-

-

-

-

-

2015

$33.2

$23.8

$23.4

-

$21.0

-

-

$15.2

$14.9

$15.3

$14.7

$14.4

$11.7

$6.9

-

15.8%

17.0%

15.3%17.9%

-

9.0%

9.0%

-

8.0%

-

7.0%

7.0%

7.7%

-

-

-

-

2016

$37.9

$26.9

$27.2

-

$24.4

-

-

$16.0

$15.7

$16.2

$15.8

$16.1

$12.6

-

-

14.4%

16.3%

12.9%16.4%

-

7.3%

-

-

6.0%

-

5.0%

6.0%

7.6%

-

-

-

-

2017

-

$30.0

-

-

$28.0

-

-

$16.8

$16.5

-

$16.8

$18.1

$13.6

-

-

-

-

11.5%14.4%

-

6.2%

-

-

-

-

5.0%

5.0%

6.1%

-

-

-

-

Note: (1) includes banner ads, online video, classified (& auctions),sponsorship, rich media, referrals/lead generation, email; includes mobile;(2) includes banner ads, rich media, sponsorships, video and other; includesadvertising that appears on desktop and laptop computers as well asmobile phones and tablets; data through 2012 is derived from IAB/PwCdata; (3) includes banner ads, rich media, social display, sponsorships andvideo; (4) includes rich media, static image, text ads and video; (5) allfigures exclude agency commissions; figures shown are before discountsfrom rate card; (6) includes banner ads, digital video, rich media (excludesvideo) and sponsorships; (7) includes banner ads, online video, rich mediaand sponsorships; (8) excludes social; (9) includes banner, email, leadgeneration, rich media and sponsorship; excludes video; (10) includesmobile; (11) includes ad banners/display ads, digital video commercials,rich media and sponsorships; (12) excludes mobile display ad spendingSource: eMarketer, Aug 2013; various, as noted, 2012 & 2013164318 www.eMarketer.com


With the exception of ZenithOptimedia and GroupM, both which have consistently low estimates for all ad formats, the majority of firms expect search ad spending to be between $18.6 billion and $21.7 billion in 2013. eMarketer’s forecast is on the high end of that range. Growth projections for this year show a greater disparity, ranging from 5.7% to 20.3%. The lack of agreement among sources will last through 2017.

Comparative Estimates: US Search Ad Spending,2012-2017

Search ad spending (billions)

Pivotal Research Group, May 2013 (1)


Jefferies, Aug 2013



PwC, June 2013 (3)





ZenithOptimedia, June 2013 (3)


MAGNA GLOBAL, Jan 2013 (6)

IAB, April 2013 (7)

Search ad spending growth (% change)

Jefferies, Aug 2013


Pivotal Research Group, Jan 2013 (1)

ZenithOptimedia, June 2013 (3)


Strategy Analytics, June 2013 (8)






SMI, March 2013

MAGNA GLOBAL, Jan 2013 (6)

IAB, April 2013 (7)

2012

$19.0

$17.7

$17.0

$17.3

$17.2

$16.9

$17.8

$16.7

$16.9$16.8

$13.1

$11.1

$17.5

$16.9

15.6%

20.0%

15.7%

15.0%

17.0%

-

14.8%

13.6%

15.0%

10.0%

5.1%

19.6%

18.4%

14.5%

2013

$21.7

$20.7

$20.5

$19.6

$19.6

$19.1

$18.8

$18.7

$18.6$18.6

$14.9

$12.2

-

-

20.3%

17.0%

15.5%

14.0%

14.0%

14.0%

13.2%

10.9%

10.0%

9.5%

5.7%

-

-

-

2014

$25.0

-

$24.1

$21.6

$22.1

$21.4

-

$20.7

$19.9$20.3

$16.9

$13.3

-

-

17.5%

-

13.3%

13.0%

13.0%

-

10.1%

9.0%

7.0%

9.5%

-

-

-

-

2015

$28.3

-

$27.3

$23.2

$24.5

$23.9

-

$22.8

$20.9$21.8

$18.9

-

-

-

13.4%

-

11.4%

12.0%

11.0%

-

7.4%

7.8%

5.0%

-

-

-

-

-

2016

$31.5

-

$31.2

$24.8

$26.9

$26.7

-

$24.9

$21.8$23.4

-

-

-

-

14.4%

-

9.8%

-

10.0%

-

6.6%

7.0%

4.0%

-

-

-

-

-

2017

$34.7

-

-

$25.6

$29.3

$29.9

-

-

$22.6$24.9

-

-

-

-

-

-

8.4%

-

9.0%

-

3.3%

6.6%

4.0%

-

-

-

-

-

Note: (1) includes mobile; (2) includes contextual text links, paid inclusion,paid listings (paid search) and SEO; includes advertising that appears ondesktop and laptop computers as well as mobile phones and tablets; datathrough 2012 is derived from IAB/PwC data; (3) paid search only; (4)includes contextual, paid inclusion, paid listings and website optimization;(5) all figures exclude agency commissions and production costs; figuresshown are after discounts from rate card; (6) excludes mobile; (7) includescontextual text links, paid listings, paid inclusion and site optimization; (8)excludes mobile search ad spendingSource: eMarketer, Aug 2013; various, as noted, 2012 & 2013164352 www.eMarketer.com

DIGITAL AD REVENUES, BY COMPANY Google will be the top digital ad publisher through 2015—the last year included in our forecast period for individual company revenues. This year, the company will take in $17.37 billion, or more than four in 10 US digital ad outlays, which will continue to be largely made up of search ad revenues.

eMarketer expects Google to gain nearly 3 percentage points in share of total digital ad revenues between 2013 and 2015. The search giant will continue to post strong growth in search ad earnings and even more substantial increases in display revenues through 2015.

Other major digital ad-selling companies will vary in net revenues for 2013. Yahoo! will capture the second-largest portion of US digital ad revenues this year, with $3.25 billion, or 7.7% of the total—a slightly lower estimate than eMarketer’s June 2013 forecast. Facebook’s digital ad revenues, which will surpass Yahoo!’s earnings in 2014, have been slightly adjusted, from $2.89 billion to $2.99 billion, due to higher-than-expected mobile ad revenues.

eMarketer has increased our projections for Microsoft’s 2013 digital ad revenues from $1.29 billion to $2.17 billion. Microsoft is now forecast to take in 5.1% of the total digital ad market—a share 2 percentage points higher than our previous estimate of 3.1%. This upward revision is a result of new information obtained directly from Microsoft.

% of total digital ad revenues

Net US Digital Ad Revenue Share, by Company,2011-2015

2011 2012 2013 2014 2015

Google 40.1% 40.9% 41.1% 42.2% 44.0%

Yahoo! 9.6% 8.6% 7.7% 7.1% 6.6%

Facebook 5.4% 5.9% 7.1% 7.7% 8.3%

Microsoft 5.2% 5.1% 5.1% 4.9% 4.7%

IAC 2.2% 2.5% 2.7% 2.6% 2.6%

AOL 2.8% 2.5% 2.3% 2.2% 2.1%

Amazon 0.8% 1.2% 1.6% 1.9% 2.1%

Twitter 0.4% 0.7% 1.1% 1.6% 1.9%

Total digital* (billions) $31.99 $36.80 $42.26 $47.58 $52.49

Note: includes advertising that appears on desktop and laptop computersas well as mobile phones and tablets, and includes all the various formatsof advertising on those platforms; net ad revenues after companies paytraffic acquisition costs (TAC) to partner sites; *data through 2012 isderived from IAB/PwC dataSource: company reports, 2012 & 2013; eMarketer, Aug 2013161719 www.eMarketer.com


Digital Search Ad Revenues, by Company Google continues to dominate the US search advertising market. Between 2013 and 2017, the company’s search ad revenues will rise from $14.31 billion to $17.07 billion, eMarketer estimates. This year, ad dollars invested toward Google search will account for nearly 73% of total search ad spending. The company’s share of the US search market will remain relatively constant through 2015.

Projected search revenues for competitors are much lower. Microsoft will have the second-highest earnings from search this year. eMarketer expects the company to take in $1.31 billion in search, or 6.7% of the total. This is higher than we initially forecast in June 2013, when we predicted $890 million in revenues, or a share of 4.6%. We have based our increase on new information from Microsoft.

Previously, eMarketer expected that Yahoo! would follow Google in search ad revenues this year. Based on newly available data, we’ve lowered our projections for Yahoo! for 2013 and beyond. Yahoo! is now ranked third for search ad revenues behind Microsoft, with $1.22 billion in net revenues and 6.2% of all search ad dollars for 2013.

Net US Search Ad Revenues as a % of US Total SearchAd Spending, by Company, 2011-2015

2011 2012 2013 2014 2015

Google 74.0% 73.8% 72.9% 73.3% 73.5%

Microsoft 6.9% 6.5% 6.7% 6.6% 6.6%

Yahoo! 6.9% 6.6% 6.2% 6.0% 5.8%

IAC 3.7% 4.2% 4.5% 4.5% 4.6%

Amazon 1.4% 2.1% 2.7% 3.3% 3.8%

AOL 1.6% 1.4% 1.3% 1.2% 1.1%

Total top 6 % of total search 94.4% 94.5% 94.2% 94.8% 95.4%

Total top 6 % of total digital 44.6% 44.5% 43.8% 43.1% 42.2%

Note: includes advertising that appears on desktop and laptop computersas well as mobile phones and tablets; net ad revenues after companies paytraffic acquisition costs (TAC) to partner sites; includes contextual textlinks, paid inclusion, paid listings (paid search) and SEOSource: company reports, 2012 & 2013; eMarketer, Aug 2013161729 www.eMarketer.com

Digital Display Ad Revenues, by Company Google will also lead the digital display ad market in 2013, with $3.06 billion in revenues and a share of 17.4% of total digital display ad revenues. eMarketer expects that as spending on Google AdSense, YouTube and mobile display advertising rises, Google will earn more than one in four display ad dollars by 2015.

Facebook’s display ad revenues are a close second to Google’s. This year, the social network will post $2.99 billion in earnings—a share of 17.0%. The company’s display ad revenues will rise more slowly than Google’s but will continue to show strong growth. eMarketer expects Facebook’s new mobile payments program to help boost increases.

Microsoft has a larger portion of total digital display ad revenues than eMarketer previously expected. New company information suggests it will earn $850 million in display ad investments this year, up from our June 2013 estimate of $400 million. We have adjusted Microsoft’s slice of the US digital display ad revenues pie upward, from 2.3% to 4.9%, at the expense of Google, Yahoo!, AOL and IAC. Microsoft has high marketing, production and maintenance costs behind its display earnings, leading to a net income loss for that division for several years despite sizeable ad revenues.

% of total digital display ad revenues

Net US Digital Display Ad Revenue Share, by Company, 2011-2015

Google

Facebook

Yahoo!

Microsoft

AOL

Twitter

IAC

Amazon

Total digital display* (billions)

2011

13.5%

14.1%

11.0%

5.2%

5.3%

1.1%

1.1%

0.4%

$12.33

2012

15.3%

14.8%

9.2%

5.1%

4.7%

1.8%

1.4%

0.6%

$14.78

2013

17.4%

17.0%

7.5%

4.9%

4.2%

2.8%

1.4%

0.8%

$17.58

2014

20.4%

17.8%

6.5%

4.4%

3.8%

3.6%

1.4%

0.9%

$20.63

2015

25.2%

18.3%

5.8%

3.9%

3.4%

4.3%

1.3%

0.9%

$23.78

Note: includes advertising that appears on desktop and laptop computersas well as mobile phones and tablets; net ad revenues after companies paytraffic acquisition costs (TAC) to partner sites; includes banner ads, richmedia, sponsorships and video; *data through 2012 is derived fromIAB/PwC dataSource: company reports, 2012 & 2013; eMarketer, Aug 2013161756 www.eMarketer.com


MOBILE AD SPENDING

US mobile ad spending will continue on a robust

growth trajectory in 2013, following high triple-digit

increases in 2012. eMarketer expects expenditures

on mobile ads, which include display, search and

messaging-based advertising on mobile phones and

tablets, to rise 95.0% this year—reaching $8.51 billion.

Based on data released since our last forecast in June 2013, eMarketer has revised our projections for mobile ad spending growth upward by nearly 20 percentage points from our previous estimate of 75.3%. This year, mobile will take in 5.0% of total media ad expenditures and more than one in five dollars spent on digital ads. By 2017, this medium will account for nearly 16% of total media ad investment and more than half of digital ad outlays in the US.

US Mobile Ad Spending, 2011-2017

Mobile adspending (billions)

—% change

—% of digital ad spending

—% of total mediaad spending

2011

$1.57

103.7%

4.9%

1.0%

2012

$4.36

178.3%

11.9%

2.6%

2013

$8.51

95.0%

20.1%

5.0%

2014

$13.09

53.8%

27.5%

7.4%

2015

$18.56

41.8%

35.4%

10.1%

2016

$24.70

33.1%

43.1%

12.9%

2017

$31.13

26.0%

50.7%

15.8%

Note: includes display (banners and other, rich media and video), searchand messaging-based advertising; ad spending on tablets is includedSource: eMarketer, Aug 2013161791 www.eMarketer.com

Search, the largest mobile ad format in the US, will take in more than half of all mobile ad spending this year, claiming nearly $4.35 billion. eMarketer estimates that display formats, which include banners, rich media, video, and other display formats such as Facebook’s Sponsored Stories and Twitter’s Promoted Tweets, will total almost $3.81 billion, or 44.8% of all mobile ad investments. Banners, rich media, and other display formats will capture the majority of spending on display, though video will gain the most share throughout the forecast period.

eMarketer has increased our forecast for all mobile ad formats since the release of our June 2013 figures. We have adjusted our projections for spending on search and display upward from our previous estimates of approximately $3.95 billion and $3.38 billion, respectively.

millionsUS Mobile Ad Spending, by Format, 2011-2017

Search

Display

—Banners, richmedia and other*

—Video

SMS/MMS/P2Pmessaging

Other (classified,email, lead gen)

Total

2011

$743

$547

$479

$68

$251

$27

$1,568

2012

$2,241

$1,848

$1,605

$244

$223

$50

$4,363

2013

$4,348

$3,809

$3,233

$576

$240

$112

$8,508

2014

$6,661

$5,988

$4,960

$1,029

$223

$214

$13,086

2015

$9,300

$8,661

$7,041

$1,619

$211

$389

$18,561

2016

$12,229

$11,571

$9,248

$2,324

$209

$695

$24,705

2017

$15,253

$14,499

$11,512

$2,987

$200

$1,176

$31,128

Note: ad spending on tablets is included; numbers may not add up to totaldue to rounding; *includes ads such as Facebook's Sponsored Stories andTwitter's Promoted TweetsSource: eMarketer, Aug 2013161792 www.eMarketer.com

As in the overall digital ad market, spending on mobile display will rise more rapidly than mobile search. Display will climb from 44.8% to 46.6% of the mobile ad market between 2013 and 2017, while search will drop 2.1 percentage points in share during that same time period. Though the gap between mobile search and display will narrow, the former will maintain its lead.

% of totalUS Mobile Ad Spending Share, by Format, 2011-2017

2011 2012 2013 2014 2015 2016 2017

Search 47.4% 51.4% 51.1% 50.9% 50.1% 49.5% 49.0%

Display 34.9% 42.4% 44.8% 45.8% 46.7% 46.8% 46.6%


30.5% 36.8% 38.0% 37.9% 37.9% 37.4% 37.0%

—Video 4.3% 5.6% 6.8% 7.9% 8.7% 9.4% 9.6%


16.0% 5.1% 2.8% 1.7% 1.1% 0.8% 0.6%

Other(classified,email, lead gen)

1.7% 1.2% 1.3% 1.6% 2.1% 2.8% 3.8%

Note: ad spending on tablets is included; *includes ads such as Facebook'sSponsored Stories and Twitter's Promoted TweetsSource: eMarketer, Aug 2013161796 www.eMarketer.com


Spending on nearly all mobile ad formats will rise significantly over the next few years, with the exception of SMS, MMS and peer-to-peer messaging. eMarketer has adjusted projections for mobile ad investment growth upward for all formats since our last forecast, based on new data.

eMarketer expects display to see stronger gains than search, supported by the triple-digit growth of spending on mobile video as well as banners, rich media, and other formats that will take place this year. Mobile video expenditures will increase the fastest in 2013, rising 136.2%. We also forecast high growth for other mobile formats, such as advertisements in mobile email and mobile classifieds such as craigslist. The small base of investments in these other formats helps boost expansion. Mobile search ad spending will post increases of 94.0% this year and remain on a strong growth path for the duration of the forecast period. Messaging-based formats will see small gains in 2013, but eMarketer predicts a decline of 7.0% in 2014.

% changeUS Mobile Ad Spending Growth, by Format, 2011-2017

Display

—Video


Search


Other(classified,email, lead gen)

Total

2011

108.3%

132.9%

105.2%

193.4%

-1.1%

-

103.7%

2012

238.0%

257.5%

235.2%

201.7%

-11.0%

86.6%

178.3%

2013

106.1%

136.2%

101.5%

94.0%

7.4%

122.3%

95.0%

2014

57.2%

78.7%

53.4%

53.2%

-7.0%

91.3%

53.8%

2015

44.6%

57.4%

42.0%

39.6%

-5.3%

82.3%

41.8%

2016

33.6%

43.5%

31.3%

31.5%

-1.0%

78.6%

33.1%

2017

25.3%

28.6%

24.5%

24.7%

-4.3%

69.1%

26.0%

Note: ad spending on tablets is included; *includes ads such as Facebook'sSponsored Stories and Twitter's Promoted TweetsSource: eMarketer, Aug 2013161793 www.eMarketer.com

Estimates for 2013 US mobile ad expenditures are wide-ranging, which is common for relatively new ad markets. Varying methodologies also significantly contribute to differences. Many research firms exclude messaging-based formats from their mobile ad spending projections, and at least one firm with a relatively low forecast includes only mobile search. eMarketer has the highest estimates for mobile ad investment through 2017, based on a bottom-up analysis of the major players in the market and the outlook for various mobile ad formats.

billions

Comparative Estimates: US Mobile Ad Spending,2012-2017

eMarketer, Aug 2013




Barclays Capital, May 2013


PwC, June 2013

BIA/Kelsey, April 2013

MMA, May 2013

Jefferies, Sep 2012



Pivotal Research Group, Jan 2013

Yankee Group, March 2013


IDC, April 2013

IAB, April 2013

MAGNA GLOBAL, Jan 2013

2012

$4.4

$4.1

$4.0

$3.4

$3.4

$3.4

$3.4

$3.2

$3.1

$2.8

$2.6

$2.9

$2.0

-

$1.2

$4.5

$3.4

$3.0

2013

$8.5

$7.2

$7.1

$5.9

$5.8

$5.7

$5.6

$5.4

$4.9

$4.4

$4.3

$4.0

$2.8

$2.4

$1.9

-

-

-

2014

$13.1

-

$11.4

$9.2

$8.7

$8.3

$7.6

$8.7

$7.1

$5.5

$6.5

-

$3.9

$3.0

$2.9

-

-

-

2015

$18.6

-

$16.6

$12.8

$1.2

$11.1

$9.6

$11.5

$9.2

$6.5

$8.7

-

$5.1

$3.6

$4.5

-

-

-

2016

$24.7

-

$22.4

$16.9

$1.4

$13.7

$11.7

$14.1

-

-

$10.8

-

$6.4

$3.9

-

-

-

-

2017

$31.1

-

-

$21.1

$1.6

$16.2

$13.7

$16.8

-

-

-

-

$8.0

-

-

-

-

-



Estimates for mobile ad spending growth also vary dramatically. At 95.0%, eMarketer has the highest projection for increases in 2013, while most other sources forecast rises between 65.0% and 80.0%. Predictions for next year are more aligned, with the majority of firms expecting percentage gains between 50.0% and 60.0%. eMarketer’s projection for 2014 falls within this range.

% change

Comparative Estimates: US Mobile Ad SpendingGrowth, 2012-2017

eMarketer, Aug 2013

Pivotal Research Group, Nov 2012


Winterberry Group,Jan 2013


Barclays Capital, Jan 2013


BIA/Kelsey, March 2013

PwC, June 2013

Cantor Fitzgerald,Sep 2012

Jefferies, Sep 2012



IAB, April 2013

IDC, April 2013

SMI, March 2013

2012

178.3%

127.1%

150.0%

180.0%

110.0%

113.0%

113.0%

-

111.2%

80.0%

76.2%

59.0%

80.0%

111.2%

88.0%

20.6%

2013

95.0%

83.2%

80.0%

77.1%

76.0%

70.0%

67.7%

66.9%

66.8%

65.0%

56.7%

42.5%

40.0%

-

-

-

2014

53.8%

22.3%

60.0%

-

55.0%

50.0%

47.1%

60.9%

35.9%

50.0%

24.3%

52.4%

-

-

-

-

2015

41.8%

18.7%

45.0%

-

40.0%

33.0%

32.9%

33.0%

26.1%

34.0%

19.2%

53.3%

-

-

-

-

2016

33.1%

15.9%

35.0%

-

32.0%

20.0%

24.1%

22.2%

21.0%

25.0%

-

-

-

-

-

-

2017

26.0%

12.0%

-

-

25.0%

14.0%

17.8%

19.2%

18.0%

-

-

-

-

-

-

-


MOBILE AD REVENUES, BY COMPANY Google is by far the dominant player in the US mobile ad market. eMarketer expects the company to capture more than $3.98 billion in mobile internet ad revenues this year, equating to 48.2% of total mobile ad revenues. This is slightly smaller than the company’s share for 2012, but by 2015, its total mobile internet ad revenues will top $9.29 billion and carve out a 50.6% share of the US mobile ad revenues pie.

Facebook will take the second-largest portion of mobile ad revenues for the entirety of the forecast period, with nearly $1.27 billion in earnings. New company information has led us to revise our estimate for 2013 upward from our June 2013 projection of $1.14 billion. The social network only began selling mobile ads in 2012, and we expect mobile revenues to rise 5.9 percentage points in share between 2012 and 2013 as demand grows. Facebook’s mobile earnings will total 15.3% of the market this year—a portion significantly smaller than Google, but more than three times the size of revenues coming from YP and Pandora.

Combined, revenues from Twitter, Apple (iAd) and Millennial Media will only account for 7.2% of mobile ad dollars, while other firms will take in just over 20% of the total.

eMarketer has increased our forecast upward for mobile ad revenues for other companies. There are many small and medium-sized companies and publishers in the mobile ad business that are competing for ad dollars with the top players on both the search and display side. While we do think there will be consolidation in the market, we expect the share of these other companies to remain high as new players emerge.

% of total

Net US Mobile Internet Ad Revenue Share, byCompany, 2011-2015

2011 2012 2013 2014 2015

Google 57.0% 52.5% 48.2% 49.2% 50.6%

Facebook - 9.4% 15.3% 15.2% 13.1%

YP 7.1% 6.1% 4.6% 4.0% 3.5%

Pandora 9.1% 5.8% 4.5% 4.2% 4.0%

Twitter - 3.3% 3.2% 3.5% 3.4%

Apple (iAd) 2.9% 3.0% 2.9% 3.3% 3.8%

Millennial Media 2.7% 1.5% 1.1% 1.1% 1.0%

Other 21.2% 18.5% 20.1% 19.6% 20.6%

Note: net ad revenues after companies pay traffic acquisition costs (TAC) topartner sites; includes display (banners and other, rich media and video)and search; ad spending on tablets is included; excludes SMS, MMS andP2P messaging-based advertising; numbers may not add up to 100% dueto roundingSource: company reports, 2012 & 2013; eMarketer, Aug 2013161803 www.eMarketer.com


Mobile Search Ad Revenues, by Company Google plays an even greater role in the mobile search ad market than in the overall mobile ad space. The company will earn more than three out of four US mobile search ad dollars between 2013 and 2015, following a share of 82.8% of the total in 2012. Though Google will maintain an overarching lead over other mobile search ad publishers, eMarketer’s new estimate for the search giant’s portion of the market for 2013 is nearly 8 percentage points lower than our June 2013 projection. We believe that Google faces more competition for local search dollars from companies with business models that facilitate monetization in mobile, such as YP and Yelp.

YP has held onto a significant share of total mobile search ad revenues in recent years primarily due to its focus on local search. But eMarketer predicts that as other companies increase their mobile search ad earnings, YP’s portion of the market will decrease.

% change and % of total mobile search ad spending

US Mobile Internet Search Ad Revenues, by Company,2011-2015

% change

Google

YP

Other

Total

% of total mobile search ad spending

Google

YP

Other

2011

-

-

-

-

83.8%

12.6%

3.7%

2012

198.2%

170.0%

389.0%

201.7%

82.8%

11.2%

5.9%

2013

79.0%

50.0%

386.7%

94.0%

76.4%

8.7%

14.9%

2014

53.0%

35.0%

64.9%

53.2%

76.3%

7.7%

16.0%

2015

40.0%

25.0%

44.8%

39.6%

76.5%

6.9%

16.6%

Note: includes advertising on search engines, search applications andcarrier portals; ad spending on tablets is included; excludes SMS, MMS andP2P messaging-based advertisingSource: company reports, 2012 & 2013; eMarketer, Aug 2013161822 www.eMarketer.com

Mobile Display Ad Revenues, by Company The mobile display landscape is not as consolidated as mobile search or the overall mobile ad space. Facebook will lead the market, with one-third of total mobile display revenues in 2013, or nearly $1.27 billion. The social network has aggressively pushed its mobile advertising program over the past year, resulting in a threefold increase in earnings since 2012. eMarketer has adjusted our forecast upward from our June 2013 estimate of $1.14 billion to reflect higher revenues.

Google may be the reigning search leader, but the company is the second-largest mobile display ad publisher, claiming 17.4% of the market this year and grabbing one in four mobile display ad dollars in 2015, boosted by YouTube display ads and Google AdSense. eMarketer has lowered our projected share for Google in 2013 while increasing the portion of revenues coming from other mobile display companies.

Like Facebook, Twitter only entered the mobile ad market in 2012. However, the social network already makes up a significant portion of total mobile display revenues. We expect that in 2013, Twitter will double its ad dollars year over year to reach $266.0 million and a share of 7.0%.

Nearly one in 10 mobile display ad dollars will go to Pandora. Between 2013 and 2015, the company will nearly double its mobile display ad revenues, but we expect it to lose share to Facebook, Google and iAd.

% of total

Net US Mobile Internet Display Ad Revenue Share, byCompany, 2011-2015

2011 2012 2013 2014 2015

Facebook - 21.1% 33.3% 32.6% 27.7%

Google 23.3% 17.0% 17.4% 20.8% 25.1%

Pandora 21.9% 12.9% 9.9% 9.0% 8.5%

Twitter - 7.3% 7.0% 7.5% 7.2%

Apple (iAd) 7.0% 6.7% 6.3% 7.0% 8.0%

Millennial Media 6.6% 3.3% 2.5% 2.3% 2.2%

Other* 41.1% 31.6% 23.7% 20.8% 21.3%

Note: net ad revenues after companies pay traffic acquisition costs (TAC) topartner sites; includes display (banners and other, rich media and video); adspending on tablets is included; excludes SMS, MMS and P2Pmessaging-based advertising; numbers may not add up to 100% due toroundingSource: company reports, 2012 & 2013; eMarketer, Aug 2013161815 www.eMarketer.com


SOCIAL NETWORK AD REVENUES

US social network ad revenues continue to rise

at a rapid pace. eMarketer expects that this year,

overall revenues will grow even faster than in 2012.

Ad dollars earned by US social platforms—which

include spending on paid ads appearing on social

networking sites, games or other applications, and

exclude nonadvertising marketing spending on

social collateral—will rise 37.4% in 2013 to reach

$4.32 billion.

eMarketer has increased our projection for overall US social network ad revenues for 2013 slightly from our previous estimate of $4.22 billion due to higher-than-expected earnings from Facebook’s mobile advertisements. This year, just over 10% of all US digital ad spending will go toward social network advertising.

billions, % change and % of digital ad spendingUS Social Network Ad Revenues, 2011-2015

2011

$2.45

27.0%

7.6%2012

$3.14

28.5%

8.5%

2013

$4.32

37.4%

10.2%

2014

$5.50

27.2%

11.6%

2015

$6.70

21.9%

12.8%

Social network ad revenues% change % of digital ad spending

Note: includes paid advertising appearing within social network sites, socialnetwork games and social network applications; excludes spending bymarketers that goes toward developing or maintaining a social networkpresenceSource: eMarketer, Aug 2013162038 www.eMarketer.com

US social network ad revenues will top $4.32 billion in 2013 and climb almost $6.7 billion by 2015. With more than $2.99 billion in revenues this year, Facebook will take in nearly seven out of 10 dollars earned through social platform advertising in the US. Facebook’s share of the social network ad revenues pie is slightly larger than what eMarketer forecast in June 2013, due to higher expectations for the site’s mobile revenues. This upward revision has boosted our overall total for US social network ad revenues from our previous estimate of $4.22 billion.

Facebook will decrease in share throughout the forecast period as Twitter and, to a lesser extent, LinkedIn expand their portions. Twitter is the second-largest social network ad publisher in the US, but is far behind Facebook, with ad revenues of $483.7 million this year, or 11.2% of the total. eMarketer expects the social platform to top $1 billion in earnings by 2015, when it will account for 15.1% of US social network ad revenues.

LinkedIn’s earnings will be half the size of ad revenues from Twitter, at $233.0 million, or a share of 5.4%. LinkedIn will account for just 6.7% of the total by 2015, but earnings from the business-oriented social network will more than double by that point.

Over 80 million people in the US will regularly play games on social network sites in 2013, and advertisers are reaching out to this audience. This year, US social game ad revenues will amount to $222.9 million, or 5.2% of total social network ad revenues—up 17.8% from 2012. Growth will remain in the double digits through 2015, when revenues will reach $311.2 million.

millions and % changeUS Social Network Ad Revenues, by Venue, 2011-2015

Facebook

—% change

Twitter

—% change

LinkedIn

—% change

Social games

—% change

Other

—% change

Total

—% change

2011

$1,734.9

51.7%

$133.9

206.7%

$106.0

85.9%

$135.4

21.4%

$335.9

-41.0%

$2,446.1

27.0%

2012

$2,182.3

25.8%

$259.5

93.8%

$164.0

54.7%

$189.2

39.7%

$349.5

4.1%

$3,144.4

28.5%

2013

$2,991.1

37.1%

$483.7

86.4%

$233.0

42.1%

$222.9

17.8%

$390.4

11.7%

$4,321.1

37.4%

2014

$3,665.0

22.5%

$750.5

55.2%

$327.0

40.3%

$273.9

22.9%

$479.3

22.8%

$5,495.7

27.2%

2015

$4,340.4

18.4%

$1,010.8

34.7%

$450.2

37.7%

$311.2

13.6%

$584.0

21.9%

$6,696.5

21.9%

Note: includes paid advertising appearing within social network sites, socialnetwork games and social network applications; excludes spending bymarketers that goes toward developing or maintaining a social networkpresence; numbers may not add up to total due to roundingSource: eMarketer, Aug 2013162045 www.eMarketer.com


% of total

US Social Network Ad Revenue Share, by Venue,2011-2015

2011 2012 2013 2014 2015

Facebook 70.9% 69.4% 69.2% 66.7% 64.8%

Twitter 5.5% 8.3% 11.2% 13.7% 15.1%

LinkedIn 4.3% 5.2% 5.4% 6.0% 6.7%

Social games 5.5% 6.0% 5.2% 5.0% 4.6%

Other 11.9% 11.1% 9.0% 8.7% 8.7%

Note: includes paid advertising appearing within social network sites, socialnetwork games and social network applications; excludes spending bymarketers that goes toward developing or maintaining a social networkpresence; numbers may not add up to 100% due to roundingSource: company reports; eMarketer, Aug 2013162039 www.eMarketer.com

RELATED EMARKETER ARTICLES

Google, Facebook Solidify Hold of US Mobile Ad Market

Major US Digital Players Shift Revenues to Mobile

Mobile Gains Greater Share of Search, Display Spending

Mobile Pushes US Digital Ad Market Higher

US Total Media Ad Spend Inches Up, Pushed by Digital

EDITORIAL AND PRODUCTION CONTRIBUTORS

Cliff Annicelli Senior EditorKaitlin Carlin Copy EditorJoanne DiCamillo Senior Production ArtistStephanie Gehrsitz Senior Production ArtistDana Hill Director of ProductionNicole Perrin Associate Editorial DirectorHeather Price Copy EditorAllie Smith Director of Charts

http://totalaccess.emarketer.com/Article.aspx?R=1010172







e marketer us_ad_spending-q3_2013_forecast_and_comparative_estimates

Documents