Retailers’ digital ad spending is expected to jump 22.5% this year, to $15.81 billion from $12.91 billion last year, according to a new estimate released today by research firm eMarketer Inc.
More than half, 50.8%, of those dollars are being spent on paid search ads, a three percentage point increase from last year. In terms of dollars, retailers are expected to spend $8.03 billion on paid search ads, a 29.9% increase from $6.18 billion in 2015.
Display ads—which eMarketer considers banners, rich media, sponsorships, video and social media ads, such as those that appear in Facebook Inc.’s news feed and Twitter Inc.’s timeline—are expected to account for 42.8% of digital ad spending this year, up from 41.0% in 2015. In terms of dollars, retailers are expected to spend $6.76 billion on display ads, a 27.8% increase from $5.29 billion in 2015. The remainder of the digital ad spending is relegated to what eMarketer labels “other,” which includes classifieds, directories, email, lead generation and mobile messaging.
Breaking video ads out of the display ads figures shows that retailers are spending $2.04 billion on the format, a 31.6% increase from $1.55 billion in 2015. Put another way, video ads are expected to account for 12.9% of retailers’ overall digital ad spending, up from 12.0% in 2015.
An unrelated survey, from digital marketing platform GetResponse, suggests that it isn’t just large retailers using video ads. The survey of 200 U.S.-based small and medium-sized businesses found that 76% of respondents said digital video was “important” to their holiday marketing strategy.
“Digital video has quickly become a critical asset for [small and medium-sized businesses],” says Simon Grabowski, GetResponse founder and CEO. “They are acting accordingly, incorporating more video-focused initiatives into their marketing mix.”
The GetResponse survey also found that 60% of small and medium-sized businesses boosted their digital marketing budgets this holiday season, 33% kept their budgets flat and 7% decreased their spending.