US Travel Industry Surpasses CPG in Digital Ad Spending

US Travel Industry Surpasses CPG in Digital Ad Spending

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eMarketer expects a shift in US digital ad spending next year, as economic factors weigh on certain industries. In 2020, financial services will displace the auto sector, while travel will surpass consumer packaged goods (CPG).

CPGs will rank fifth this year in US digital ad spending at $11.12 billion.  But the travel industry will overtake CPG by 2020. Travel-related companies will spend $12.97 billion on digital ads next year, while CPG firms will spend $12.80 billion.

“For the CPG and travel industries, we are seeing contrasting market dynamics leading to a contradictory trend in digital ad budgets in 2019,” said Oscar Orozco, forecasting analyst at eMarketer. “While consolidation in the CPG sector is leading to a squeeze in ad budgets, increased competition in the travel industry is spurring digital ad spending, as brands fight for market share and consumers’ attention.”

Mobile is a key driver of online ad spending among hotels, airlines and other travel industry services. In fact, the travel sector spends more of its digital budget on mobile than any other industry with 70.1% in 2019.

Next year, the auto sector will fall behind financial services in digital outlays. In 2020, the auto industry will spend $18.15 billion on digital ads, while financial services will spend $18.25 billion.

“We expect weakness in the automotive market to hurt digital ad spending into the coming years,” Orozco said. “While dealers have seen subdued advertising budgets recently, automakers are also busy grappling with new technologies, shifts in consumer behaviors and stricter emission standards. All of this is being prioritized, leading brands to pivot their focus from ad spending to research and development.”

Mobile is driving digital ad spending within the financial sector, as firms look to target millennials specifically In fact, 69.4% of all financial sector digital spending is on mobile, making it the No. 2 industry for mobile outlays.

Meanwhile, the US retail sector remains No. 1 in digital ad spending with nearly 22% market share, far ahead of other industries. Retailers and related companies will spend $28.33 billion this year in online ads, a 19% gain from last year. Retail also commands the highest portion of mobile ad spending in the US. Retail leads all other industries in video. The sector will control 19.2% of all US video ad spending this year, which will make up nearly half of the sector’s digital display budget.

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