Ad Spending Hits a New High as Search Ads, Out-of-Home and Amazon Rise
April 05 2019 - 7:29AM
Dow Jones News
By Nat Ives
Marketers drove U.S. advertising spending to a new peak last
year, fueled by several large ad events -- the Winter Olympics, the
World Cup and the midterm elections -- as well as demand for
keyword-search and out-of-home ads.
U.S. ad spending totaled $212.4 billion in 2018, up 9.6% from
the year before, according to a new report from Magna, topping the
ad-buying group's earlier prediction that U.S. ad spending would
rise 7.5% to $208.1 billion. It was the ninth consecutive year of
growth.
Search-ad spending surged 22.5% to $53.5 billion, aided by
enhancements to search-result displays and other advances,
according to Vincent Létang, executive vice president of global
market intelligence at Magna, which is part of the Interpublic
Group of Cos. "It may not be in the spotlight as much as social
media or digital media, but it keeps improving, especially in the
last few years," he said.
Search has grown between 17% and 20% in recent years by Magna's
calculations. "We expected that growth rate to slow down somewhat
and instead it accelerated," Mr. Létang said.
Brands also are pouring more money into Amazon.com Inc.'s paid
search ads.
Amazon more than doubled its ad revenue to roughly $6 billion in
2018, Magna said. Amazon has been rapidly increasing its offerings
to marketers, empowered by its data on consumers' shopping habits
and its direct role in actual sales.
Amazon also increased its own ad outlay by 50% last year to join
the country's top 10 ad spenders, Magna estimated, ranking the
company at No. 6 behind Procter & Gamble Co., AT&T Inc.,
Berkshire Hathaway Inc.'s Geico, Comcast Corp. and General Motors
Co.
Spending on out-of-home advertising channels such as billboards,
cinema ads, and video screens in elevators and at gas pumps rose
4.3% to $8.2 billion, Magna said, partly on the strength of new
interest from technology companies and direct-to-consumer brands
that are expanding beyond their roots in social media.
The spread of digital screens and the erosion of other ad
channels' audiences also helped out-of-home advertising, Mr. Létang
said. "Some demographic targets are increasingly difficult to reach
through television or print, but they're still reachable through
out-of-home, and sometimes in a more cost-efficient way," he
said.
Excluding cyclical events such as the Olympics, U.S. ad spending
in 2018 rose 7.3% to $207.5 billion, Magna said.
Marketers will spend some $217 billion on advertising in 2019,
Magna predicted, an increase of 1.9%, or 4.1% excluding cyclical
effects.
Write to Nat Ives at nat.ives@wsj.com
(END) Dow Jones Newswires
April 05, 2019 07:14 ET (11:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Amazon.com (NASDAQ:AMZN)
Historical Stock Chart
From Apr 2023 to Apr 2024