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Study: Amazon Expected to Drive Future Digital Ad Spend Growth

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In 2016, roughly $35 billion was spent on search advertising. In the first half of 2017, paid search accounted for roughly half of all digital ad spend at $19.1 billion. Mobile ad formats and strategies played a huge role in this, as many brands sought to deliver stronger search experiences for customers on mobile devices.

Paid search remains the top form of digital advertising for many brands, but the landscape appears to be shifting as new online marketplaces disrupt consumer behaviors. A new report from Forrester revealed that retail brands will invest 55% more in online marketing and advertising by 2023, but less in traditional search channels like Google.

Consumers are altering shopping behaviors, opting for retail websites, like Amazon, more often than search engines to complete purchases. This shift in behavior is expected to be the primary driver of online ad spend in “new” channels. For marketers, a shift to new channels like Amazon means new ad platforms, targeting techniques, ad formats, etc.

This is more of a shift in the retail space, but all brands and businesses need to understand which digital channels target customers are using to find related products, services and information. With this understanding, these businesses can deliver a “search experience” that drives new business and interest.

In addition to Amazon disruption, the report went on to list two other trends that will impact search marketers: voice search and the influence of mobile on sales.

Forrester also estimates that as marketers spend their advertising dollars in other areas, Google’s 2016 78% market-share estimate will continue declining. This makes sense, as around 55% of consumers are going directly to Amazon for product searches, while only 28% are starting on a traditional search engine.

At LSA18, we will be exploring “The Amazon Factor” offering insights into the company’s cutting-edge products and services. View the agenda.

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