{"id":17257,"date":"2023-10-16T13:44:46","date_gmt":"2023-10-16T17:44:46","guid":{"rendered":"https:\/\/illumin.com\/?p=17257"},"modified":"2025-01-30T06:06:14","modified_gmt":"2025-01-30T11:06:14","slug":"retails-higher-ad-spend-in-2023","status":"publish","type":"post","link":"https:\/\/illumin.com\/insights\/blog\/retails-higher-ad-spend-in-2023\/","title":{"rendered":"Retail\u2019s resilience leading to higher ad spend in 2023"},"content":{"rendered":"

By far, the retail industry<\/a> has consistently spent the most ad dollars of any industry in the US and this is set to continue. <\/span>eMarketer<\/span><\/a> predicts that retail\u2019s \u201coutsized role in digital ad spending will help offset the impact of a broader slowdown in growth in the US digital ad market.\u201d<\/span><\/p>\n

Analysts predict that retail spending on digital ads<\/a> will grow by 12.2% in 2023, which is above the average spending rate of 7.8%. Retail is predicted to spend $73.55 billion on digital ads this year, meaning the industry will make up 27.9% of total digital ad spending in the US.<\/span><\/p>\n

42% of digital ad growth in 2023 is expected to come from the retail industry. Given the rest of the ad world is seeing a slowdown, these massive numbers demonstrate the sheer resilience of retail in the face of economic downturn.\u00a0<\/span><\/p>\n

Perhaps retail is the answer to tempering some of the impact of the current economic situation.\u00a0<\/span><\/p>\n

\"Ad<\/p>\n

Retail ad spending is shifting and growing\u00a0<\/span><\/h2>\n

As stated above, retail is by and far the biggest ad spending vertical in the US, and accounts for 27.9% of the almost $264 billion in <\/span>US digital ad spending<\/span><\/a> expected this year.<\/span><\/p>\n

It\u2019s above average growth is expected to hit 12.2% this year and 14.2% in 2024, continuing to grow and hold its critical spot in the ad market.\u00a0<\/span><\/p>\n

Video ads also contribute to the industry’s gains in display ad<\/a> spending. This year, retail spending on video ads is expected to <\/span>grow by 20.9%<\/span><\/a> and another 19.5% in 2024. However, retail’s video budget will continue to be lower than other industries (sitting at 50.7% compared to 57.1%). This is because<\/span> lower-funnel search ads are still a mainstay for most retail.<\/span><\/p>\n

Another consideration for retail is the growth of mobile ads. Overall, ad spending on mobile and non-mobile platforms is keeping pace with past years, increasing by only 12.2% this year. But the focus on mobile ads is starting to shift, with the share of retail ad spend on mobile forecasted to increase slightly from <\/span>63.5% in 2023<\/span><\/a>.<\/span><\/p>\n

Unsurprisingly, apparel and accessories retailers are expected to have the highest digital ad spending in the industry. Over the next few years, this sector is projected to slightly increase its share of retail digital ad spending to nearly 30%.\u00a0<\/span><\/p>\n

Sky Canaves <\/span>eMarketer<\/span><\/a> report definitively states that \u201cNo other industry comes close to retail.\u201d This is clearly demonstrated by the ownership the sector has over the entire advertising industry.\u00a0<\/span><\/p>\n

For perspective, that\u2019s over $34 billion more than the next closest industry, which is consumer packaged goods. This share of the ad market is only set to grow, peaking at 28.6% of the market next year.\u00a0<\/span><\/p>\n

An important consideration when looking at this industry growth, is ecommerce. Retail digital ad spending increases come hand in hand with an almost doubling of <\/span>US retail ecommerce<\/span><\/a> sales from 2019 to 2023.\u00a0<\/span><\/p>\n

As ecommerce grows, so does the retail industry\u2019s ad spend. This shows the power of retail in the economy, both online and in-person. And, the consistency of spending within the sector over the past few years, and predicted steady increase in spending, shows that retail is a safe bet for ad agencies and marketers going forward.\u00a0<\/span><\/p>\n

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