As we enter 2024, the landscape of digital advertising in the US continues to evolve, with digital channels capturing a staggering 77.7% of total ad spend. While retail remains the largest contributor by sheer volume, this year marks significant shifts in growth drivers, with sectors like telecom and politics making strong advances. Let’s dive into the key industries shaping the growth of US digital ad spending in 2024.
Retail’s Digital Ad Spend Slows
Despite its dominant position, retail’s digital ad spend growth (10.6%) has fallen below the overall industry average of 12.6% for the first time. Historically, retail has been the biggest spender, consistently increasing its share of digital ad budgets. However, this year, growth in the retail sector has slowed, though its total spend still reaches a hefty $83.09 billion, more than twice the amount of its nearest competitor, consumer packaged goods (CPG), at $49.95 billion.
Telecom Surges to Lead in Growth
Taking the top spot for digital ad spend growth in 2024 is the telecom industry, which is expected to grow by 20.9%. Just a few years ago, telecom was lagging, but 2023 saw a resurgence, and that momentum has carried into this year. Telecom’s digital ad spend is projected to reach $20.27 billion.
Telecom companies are focusing heavily on display ads, accounting for 64.7% of their digital spend, and are launching nationwide campaigns to regain market share.
Politics Drives Growth in the “Other” Category
The 2024 presidential election is boosting digital ad spend in the “other” category, with a sharp growth rate of 19.5%. Political ad spend is expected to hit $3.46 billion, more than double the $1.35 billion spent in the 2020 election cycle. This rapid growth is unlikely to sustain past the election year, but it’s currently a significant driver of overall digital ad spend.
CPG Growth Shifts from Food to Beverages and Cosmetics
While consumer packaged goods (CPG) remains the second-largest sector in terms of digital ad spend (16.5%), there’s a noticeable shift happening within this category. Traditionally, food has dominated CPG ad spend, but growth in the food sector has sharply declined, dropping to 5.4% in 2024 from 19.6% in 2023.
Instead, other subcategories like beverages—both alcoholic and non-alcoholic—along with toiletries and cosmetics, are driving CPG’s overall growth. Toiletries and cosmetics, in particular, are seeing a substantial 19.2% growth this year.
Media and Entertainment Struggles with Minimal Growth
After a challenging year in 2023, media and entertainment continue to face headwinds. Growth in this sector is projected at just 2.7% in 2024, largely due to disruptions from Hollywood strikes and a lack of new content. The category makes up 9.3% of total US digital ad spend and is heavily reliant on display (65.7%) and mobile ad formats (67.8%).
While retail still dominates in terms of overall digital ad spend, telecom, politics, and nonfood CPG categories are taking the lead in growth. The evolving trends in these industries show how companies are adjusting their strategies to navigate a changing digital landscape.
To keep up with these shifts, marketers should pay attention to emerging categories, leverage creative and targeted ad strategies, and capitalize on opportunities in growing sectors like telecom and non-alcoholic beverages.
Source: EMARKETER.
